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Wall Street Asks Biden Not to Veto Congressional Rejection of SEC’s SAB 121 Crypto Policy
In a rare lobbying overlap with the cryptocurrency world, Wall Street banks and members of Congress are calling on President Joe Biden to reverse route on his promise to veto the US Congressional resolution aimed at overturning the crypto accounting policy of the US Securities and Exchange Commission (SEC).
In recent bipartisan votes that saw many members of Biden’s party reject his opposition, Congress decided to reject Staff Accounting Bulletin No. 121 (SAB 121) of the SEC, a controversial accounting standard that would require banks to treat customers’ digital assets differently than other assets, requiring them to be maintained on a bank’s balance sheet. Crypto firms have argued that this threatens their ability to do business with banks, and bankers agree.
“SAB 121 effectively precludes regulated banking organizations from offering custody of digital assets on a large scale because it treats the assets as if they were owned rather than simply held in custody by a banking organization,” read a letter to Biden on Friday , signed by several groups including the American Bankers Association and Financial Services Forum. “Institutions forced to register digital assets held on their balance sheets are subject to higher capital, liquidity and other prudential requirements, unlike their non-bank competitors.”
The letter came the same day that Sen. Cynthia Lummis (R-Wyo.) and Rep. Patrick McHenry (R-N.C.) released your own letter to Biden, on May 30, similarly asking him not to veto, or at least to “work with the SEC to rescind the staff guidance.”
“The revocation of SAB 121 is within the authority of the SEC and there is ample precedent for reviewing a staff accounting bulletin,” the letter reads. “Indeed, most staff accounting bulletins over the past three decades have been revisions and rescissions of previous guidance.”
Seven other representatives signed the letter, including Reps. Mike Flood (R-Neb.) and Wiley Nickel (DN.C.), the resolution’s sponsors.
Biden’s veto threat The resolution noted that clearing the rule under the Congressional Review Act would mean that nothing similar could be implemented by the SEC in the future, which would “inappropriately constrain the SEC’s ability to ensure adequate guardrails and address future crypto-related issues.” activities, including financial stability”. .”
The group of 11 Senate Democrats who went against the president included Majority Leader Chuck Schumer (D-N.Y.) and Sen. Ron Wyden (D-Ore.), chairman of the Senate Finance Committee, who said on CoinDesk’s Consensus 2024 on Friday that the SEC’s policy “fundamentally establishes a different standard for cryptocurrencies than anyone else has done in the financial industry.”
Last week, SEC Chairman Gary Gensler he tried to explain SAB 121 as an attempt by the regulator to respond to the turbulence and investor harm occurring in the cryptocurrency industry in 2022. It argued that it was “only” a staff bulletin intended to address the fact that failures Collapsed cryptocurrency firms were treating client assets as part of their bankruptcy estates.
Biden did it until Monday make a final decision whether or not to veto the resolution.