Biden Vetoes Congressional Resolution Overturning SEC Crypto Guidelines

President Joe Biden vetoed a resolution on May 31 that sought to overrule the U.S. Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin (SAB) No. 121, a move that has drawn significant criticism from the cryptocurrency industry.

The Blockchain Association expressed its disappointment in a social media post, stating, “We’re disappointed that the administration chose to overrule bipartisan majorities in both Houses of Congress who recognised the harm created by SAB 121.”

Biden defended his decision, asserting that overturning the SEC’s proposed guidelines would undermine the agency’s authority. “This reversal of the considered judgement of SEC staff in this way risks undercutting the SEC’s broader authorities regarding accounting practices,” he wrote in an official letter.

The guidelines in question require institutions that custody crypto assets to record these holdings as liabilities on their balance sheets. While intended to enhance consumer protection, the guidelines faced significant opposition from both lawmakers and the crypto community, who argue that they stifle innovation.

Despite the bipartisan support for the repeal, with the House voting 228 to 182 and the Senate 60 to 38 in favour, Biden remained firm. “My administration will not support measures that jeopardise the well-being of consumers and investors,” he added.

Prominent figures in the crypto industry voiced their frustration. Cody Carbone of the Digital Chamber called the decision “a slap in the face of innovation and financial freedom,” while Ripple CEO Brad Garlinghouse described it as “incredibly disappointing” at a critical time for the industry.