U.S. President Biden Vetoes Resolution to Overturn SEC Guidance

President Joe Biden has vetoed a House Joint Resolution that sought to repeal the Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin 121, a controversial directive requiring financial institutions holding cryptocurrency for customers to include these assets on their balance sheets. The veto, announced on Friday afternoon, reflects Biden’s commitment to consumer and investor protection.

In his statement, Biden emphasized his opposition to any measures that could compromise the well-being of consumers and investors. “This Republican-led resolution, by invoking the Congressional Review Act, would unduly limit the SEC’s ability to establish necessary safeguards and address emerging issues,” Biden stated. “Reversing the SEC staff’s informed judgment in this manner threatens to undermine the SEC’s broader authority over accounting practices.”

Biden’s veto aligns with his previous remarks about the need for legislative collaboration to establish robust regulations for the digital asset market. He reiterated the necessity of appropriate guardrails to protect consumers and investors.

The veto follows strong advocacy from banking groups and members of Congress, who had sent letters urging Biden to sign the resolution. Critics of SAB 121 argue that it hinders regulated banking groups from offering crypto custody services, as noted by the Government Accountability Office.

The resolution had passed both the House and the Senate with significant majorities. Earlier on Friday, Senator Ron Wyden (D-Ore.), a supporter of the resolution, voiced concerns at CoinDesk’s Consensus 2024 conference in Austin, Texas. Wyden argued that the SEC guidance imposes different standards for crypto compared to other assets within the financial sector.

Despite the strong congressional support for overturning SAB 121, Biden’s veto highlights his administration’s stance on maintaining stringent oversight and regulatory clarity in the rapidly evolving crypto industry.