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On Friday afternoon, President Joe Biden announced his decision to veto a House of Representatives move that sought to repeal the Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin 121 (SAB 121).
The controversial SEC accounting guidance requires financial institutions holding crypto assets for customers to include these assets on their own balance sheets, which critics argue makes it challenging for these institutions to work with crypto companies. In his veto statement, President Biden wrote:
This Republican-led resolution would inappropriately constrain the SEC’s ability to set forth appropriate guardrails and address future issues. This reversal of the considered judgment of SEC staff in this way risks undercutting the SEC’s broader authorities regarding accounting practices. […] My Administration will not support measures that jeopardize the well-being of consumers and investors.
Banks can’t hold crypto
The veto announcement came shortly after banking group American Banker Association sent a letter to the President, urging him to sign the resolution to overturn SAB 121. The banking organizations’ letter argued that the guidance, as per the Government Accounting Office, prevents regulated banking groups from offering custody services.
Lawmakers also requested that the administration work with the SEC to rescind the guidance if the President still intended to veto the resolution. Despite the resolution passing both chambers of Congress with significant majorities, President Biden’s veto demonstrates his administration’s stance on the matter.
Senator Ron Wyden (D-Ore.), a member of Biden’s party who voted for the resolution, criticized the guidance during CoinDesk’s Consensus 2024 conference in Austin, Texas, arguing that it creates a different standard for crypto compared to other assets in the financial sector.
