President Joe Biden recently blocked a congressional attempt to nullify a contentious crypto accounting policy implemented by the Securities and Exchange Commission (SEC). The action fulfills his promise to veto a House Joint Resolution aimed at overturning the SEC’s Staff Accounting Bulletin 121 (SAB 121). The disputed SEC ruling requires financial firms to keep customer-held crypto assets on their balance sheets, drawing criticism from those who believe it unfairly complicates collaboration between finance institutions and crypto businesses.
Expressing his stance, Biden emphasized a refusal to endorse any actions that may potentially undermine consumer and investor welfare. He opined that using the Congressional Review Act to pass the Republican-led resolution would unduly limit the SEC’s capacity to set suitable safeguards and address emerging issues.
Consistent with his earlier remarks, Biden reiterated a commitment to cooperating with Congress to formulate legislation targeting the digital asset market. He calls for “appropriate guardrails” as a necessary means of protecting consumers and investors.
Amid this, banking organizations and several members of Congress forwarded two letters to Biden’s office, imploring him to approve the resolution reversing SAB 121. These groups say this policy obstructs regulated banking groups from providing custody services according to the Government Accounting Office. If Biden’s veto continued as threatened, they urged a cooperative effort with the SEC to abolish the guidance. Even so, the resolution gained extensive support in both chambers of Congress.
Earlier, Sen. Ron Wyden, a Democrat allied with Biden who supported the resolution, opined at the Consensus 2024 conference that the guidance imposes a different standard on crypto than other financial assets.