Washington, DC, Monday, June 10, 2024 – President Biden vetoed a bill passed by Congress that aimed to overturn a policy set by the Securities and Exchange Commission (SEC) regarding how banks handle cryptocurrency. This policy, known as Staff Accounting Bulletin 121 (SAB 121), requires banks to classify crypto assets held on behalf of clients as liabilities.
The veto comes after bipartisan support for the bill in both the House and Senate. Supporters argued that SAB 121 discourages banks from entering the cryptocurrency custody market, hindering wider adoption and potentially leaving consumers vulnerable.
In his veto statement, dated May 31, President Biden emphasized the importance of the SEC’s role in protecting investors and consumers. He argued that overturning SAB 121 would limit the SEC’s ability to regulate the cryptocurrency industry effectively.1
The Biden administration has indicated a willingness to work with Congress on establishing a comprehensive framework for regulating digital assets. However, the veto highlights the ongoing debate about the appropriate level of government involvement in the cryptocurrency market.
Biden vetoed H.J. Res. 109, a resolution aiming to reverse the Securities and Exchange Commission’s guidance on banks and crypto assets.
The resolution targeted the SEC’s Staff Accounting Bulletin 121, which requires banks to treat customers’ crypto assets as liabilities.
While criticized by banking groups for its costliness, regulators argue it’s essential for investor protection, especially post the collapse of companies like FTX.
Biden emphasized the need for appropriate SEC oversight, citing potential risks to consumers and investors. Despite mostly Republican support, some Democrats also backed the resolution.
The veto leaves room for further discussions on crypto regulation, with the administration expressing willingness to collaborate with Congress for a comprehensive framework.
The Statement by Biden is given below-
“I am returning herewith without my approval H.J.Res. 109, a resolution that would disapprove of the Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin No. 121 (SAB 121).
SAB 121 reflects considered technical SEC staff views regarding the accounting obligations of certain firms that safeguard crypto-assets. By virtue of invoking the Congressional Review Act, this Republican-led resolution would inappropriately constrain the SEC’s ability to set forth appropriate guardrails and address future issues. This reversal of the considered judgment of SEC staff in this way risks undercutting the SEC’s broader authorities regarding accounting practices. My Administration will not support measures that jeopardize the well-being of consumers and investors. Appropriate guardrails that protect consumers and investors are necessary to harness the potential benefits and opportunities of crypto-asset innovation. My Administration is eager to work with the Congress to ensure a comprehensive and balanced regulatory framework for digital assets, building on existing authorities, which will promote the responsible development of digital assets and payment innovation and help reinforce United States leadership in the global financial system.”
- whitehouse.gov: https://www.whitehouse.gov/briefing-room/presidential-actions/2024/05/31/a-message-to-the-house-of-representatives-on-the-presidents-veto-of-h-j-res-109/[↩]
