Biden Vetoes Bill Aiming to ‘Undercut’ SEC Crypto Authority

U.S. President Joe Biden has vetoed a bill that aimed to overturn a Securities and Exchange Commission (SEC) bulletin setting accounting standards for firms that custody cryptocurrency.

In an official letter dated May 31, Biden expressed concerns that the bill's reversal of the SEC staff's judgment could undermine the SEC's broader authorities on accounting practices. The legislation targeted the SEC's cryptocurrency accounting guidelines, mandating institutions holding crypto assets to classify them as liabilities on their balance sheets.

The President emphasized his Administration's commitment to protecting consumers and investors and ensuring appropriate guardrails for crypto-asset innovation to maximize benefits and opportunities.

Congressional Support and Presidential Veto

Both the House and Senate recently voted in favor of repealing the SEC's staff accounting bulletin, SAB 121. The guidance directed financial institutions holding crypto to list the assets on their balance sheets, a move criticized for complicating financial institutions' engagement with crypto companies.

The House approved the measure with a 228-182 vote, predominantly supported by Republicans, with 21 Democrats also in favor. The Senate followed suit with a 60-38 vote, including bipartisan support from several Democrats.

Industry Reaction: Slap in the Face or Commendable?

Biden's veto received swift criticism from the cryptocurrency industry. The Blockchain Association expressed disappointment with the veto, highlighting bipartisan opposition to SAB 121 and its negative impact.

Cody Carbone, chief policy officer at the Digital Chamber, condemned the decision as detrimental to innovation and financial freedom.

Concerns and Speculations

The veto prompted concerns within the crypto community, raising questions about the Biden campaign's engagement with the crypto industry and potential shifts in its stance. Individuals like Moe Vela and Sheila Warren shared their views on the veto and its implications, underscoring the importance of understanding candidates' perspectives on integrating crypto into financial systems.