In a controversial move that sparked criticism from the cryptocurrency sector, President Joe Biden has vetoed a resolution aimed at overturning the U.S. Securities and Exchange Commission (SEC) Staff Accounting Bulletin (SAB) No. 121.

The resolution received bipartisan support in Congress, indicating widespread opposition to the SEC's directive within the legislative branch and the crypto community.

Impact of the SEC's SAB No. 121

SAB No. 121, slated to be effective on April 11, requires institutions holding cryptocurrency on behalf of clients to classify these assets as liabilities on their financial statements. This accounting rule has faced backlash, with opponents claiming it distorts the essence of crypto holdings and imposes unnecessary burdens on custodians.

Response from the Industry and Legislature

Following President Biden's veto, the Blockchain Association, a leading crypto advocacy group, expressed disappointment, highlighting the rejection of bipartisan consensus on the harmful effects of SAB 121. Critics argue that these guidelines hinder innovation and misconstrue the financial aspects of digital assets.

Justification of President Biden's Veto

President Biden justified his decision, stating that overturning the SEC's guidelines would weaken the SEC's authority and compromise its broader regulatory oversight. He emphasized the administration's dedication to safeguarding consumers and investors, warning that repealing the rules could put them at risk.

Despite bipartisan support for the repeal in Congress, President Biden's veto represents a substantial obstacle to challenging the SEC's approach to crypto asset accounting.

Reaction from the Crypto Community

The veto has elicited frustration and disapproval from the crypto community, who perceive it as a hindrance to industry growth. Industry leaders, including Cody Carbone and Ripple CEO Brad Garlinghouse, expressed disappointment, citing the impact on innovation and financial freedom.

This decision by President Biden has generated significant debate and disappointment within the cryptocurrency sector.