President Biden Uses Veto to Keep SAB 121 Intact, Protects SEC’s Crypto Outreach
Despite the lawmakers requesting President Joe Biden to revoke the controversial Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin 121 (SAB 121), the President has decided to veto the bill.
What’s the SAB 121 Repeal for Crypto?
Last month in May, both the House and Senate voted to repeal the SEC’s staff accounting bulletin, known as SAB 121. The House passed the measure with a 228-182 vote, primarily supported by Republicans, though 21 Democrats also backed it. A week later, the Senate approved the repeal with a 60-38 vote, including several Democrats such as Senate Majority Leader Chuck Schumer, D-N.Y.
While addressing the U.S. House of Representatives on Friday, May 31, Joe Biden stated: “My Administration will not support measures that jeopardize the well-being of consumers and investors. Appropriate guardrails that protect consumers and investors are necessary to harness the potential benefits and opportunities of crypto-asset innovation.”
With this announcement, it is clear that the Biden administration is willing to maintain the SEC’s stronghold over crypto regulations. The statement from the White House further adds that ” limiting the SEC’s ability to maintain a comprehensive and effective financial regulatory framework for crypto-assets would introduce substantial financial instability and market uncertainty.”
The SAB 121 bulletin has drawn concerns over the past year, especially among the crypto industry. Many believe that the bulletin would prevent banks from offering crypto custodial services. The bulletin requires the crypto custodial firms to record the crypto holdings of its customers as liabilities on their balance sheets. However, the SEC has been defending SAB 121 calling it “non-binding staff guidance” that bolsters the disclosures to customers.
Will Lawmakers Overturn Biden’s Veto?
Overturning a veto necessitates a two-thirds majority vote in both houses of Congress. A veto won’t gain him any votes, but it could potentially cost him 500 votes in Wisconsin, Michigan, Pennsylvania, Arizona, and Nevada.
This is a dumb hill for Biden to die on
Veto will earn exactly 0 votes— but will likely cost him 500 votes in WI, MI, PA, AZ and NV https://t.co/H0XeivnDLX
— Jeff Roberts (@jeffjohnroberts) May 31, 2024
Responding to the White House decision to repeal the SAB 121, Ripple CEO Brad Garlinghouse stated: “To say that this is incredibly disappointing from this white house – at an incredibly pivotal time – is an understatement”.
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