President Biden Uses Veto to Keep SAB 121 Intact and Protect SEC’s Crypto Reach

President Joe Biden decided to veto the bill despite calls from lawmakers to rescind the controversial Securities and Exchange Commission (SEC) Staff Accounting Bulletin 121 (SAT 121).

What is the SAB 121 repeal for cryptocurrencies?

Last month, in May, both the House and Senate voted to repeal the legislation SEC Staff Accounting Bulletin, known as SAB 121. The House passed the measure by a vote of 228-182, supported mostly by Republicans, although 21 Democrats also supported it. A week later, the Senate passed the repeal by a vote of 60-38, including several Democrats such as Senate Majority Leader Chuck Schumer, D-N.Y.

On Friday, May 31, addressing the United States House of Representatives, Joe Biden said: “My administration will not support measures that jeopardize the well-being of consumers and investors. Adequate guardrails that protect consumers and investors are needed to capitalize on the potential benefits and opportunities of cryptocurrency innovation.”

With this announcement, it is clear that the Biden administration is willing to maintain SEC control over cryptocurrency regulation. The declaration of White House It 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 sparked concerns over the past year, especially in the cryptocurrency sector. Many believe the bulletin would prevent banks from offering cryptocurrency custody services. The bulletin requires cryptocurrency custodians to record their clients’ cryptocurrency holdings as liabilities on their balance sheets. However, the SEC defended SAB 121 as “non-binding staff guidance” that strengthens customer disclosures.

Will lawmakers overturn Biden’s veto?

A two-thirds majority vote in both houses of Congress is required to override the veto. A veto won’t win him any votes, but could potentially cost him 500 votes in Wisconsin, Michigan, Pennsylvania, Arizona and Nevada.

Responding to the White House’s decision to repeal SAB 121, Ripple CEO Brad Garlinghouse said: “To say this is incredibly disappointing on the part of this White House – at an incredibly crucial time – is an understatement.”

He added: “If the Biden administration is truly serious about change (and finally waking up to the crypto electorate) – the most important thing they can do is call for Gary Gensler to resign.”

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