Biden Vetoes SAB 121 Repeal, Citing Consumer Protection Concerns

United States President Joe Biden has vetoed a resolution to overturn the U.S. Securities and Exchange Commission (SEC) Staff Accounting Bulletin (SAB) No. 121. 

Biden’s Veto Sparks Crypto Industry Backlash

According to Biden’s official May 31 letter, this decision aims to safeguard the well-being of consumers and investors. However, the veto has sparked an immediate backlash from the cryptocurrency industry.

1/ Today, despite bipartisan support, Pres Biden vetoed the repeal of SAB 121, the SEC’s punitive, anti-crypto accounting guidelines. We’re disappointed that the admin chose to overrule bipartisan majorities in both Houses of Congress who recognized the harm created by SAB 121. pic.twitter.com/F6GP727UBx

— Blockchain Association (@BlockchainAssn) May 31, 2024

The resolution, which had garnered bipartisan support in both the House and the Senate, aimed to repeal the SEC’s guidelines that mandate institutions custodying crypto assets to record these holdings as liabilities on their balance sheets. Lawmakers in the House voted 228 to 182 in favor of the repeal, while the Senate echoed this sentiment with a 60-38 vote.

Crypto Community Expresses Frustration Over Regulatory Stance

However, Biden’s veto statement emphasized maintaining the SEC’s authority over accounting practices. He argued that overturning the guidelines would undermine the SEC’s broader regulatory powers. “Challenging the proposed guidelines would compromise the SEC’s authority,” Biden stated, reiterating his commitment to protecting consumers and investors.

The SEC’s guidelines, set to take effect on April 11, have faced significant opposition from the crypto community. Critics argue that the rules stifle innovation and hinder the industry during a crucial time. The guidelines require institutions that custody crypto assets to account for these holdings as liabilities, a move seen as detrimental to the burgeoning sector.

Crypto advocacy groups have expressed their disappointment with the administration’s decision. The Blockchain Association, a prominent industry group, voiced its concerns on social media. “We’re disappointed that the administration chose to overrule bipartisan majorities in both Houses of Congress,” the group stated in a May 31 post. They emphasized that the veto disregards the harm created by SAB 121.

Biden vetoes the resolution to nullify SAB 121.

Process? Who cares.

Consumer protection? No thanks.

Appeasing Gensler’s crypto vendetta? Sure thing.

This is a slap in the face to innovation and financial freedom. #Crypto #Fail pic.twitter.com/4QPhKkhN4r

— Cody Carbone (@CodyCarboneDC) May 31, 2024

The wider crypto community also took to social media to express their frustrations. Cody Carbone, the chief policy officer of the Digital Chamber, criticized the decision as a setback for innovation and financial freedom. “This is a slap in the face to innovation and financial freedom,” Carbone stated. Ripple CEO Brad Garlinghouse echoed these sentiments, calling the decision “incredibly disappointing” at a pivotal time for the industry.

President Joe Biden’s veto of the resolution to repeal SEC Staff Accounting Bulletin (SAB) No. 121 has ignited a debate within the cryptocurrency industry. While critics argue that the guidelines stifle innovation, proponents emphasize the importance of regulatory clarity and investor protection.