US President Joe Biden signed a veto to stop a resolution from overturning the Staff Accounting Bulletin No. 121 (SAB 121) of the SEC (Securities and Exchanges Commission) on Friday, riling immediate contention from the crypto industry.
The resolution to rescind the SEC’s guidelines saw bipartisan support in both the Houses of Congress – the House of Representatives and the Senate, with them voting 228 to 182 and 60 to 38, respectively, to repeal the bulletin. SAB 121 is an accounting guideline instructing financial institutions dealing with crypto to record digital assets as liabilities, forcing these investors to keep the assets on their balance sheets.
The legislation poses hurdles to institutions wanting to deal with digital assets, straining their working relationships with crypto companies. It was set to take effect on April 11 but was met with stark opposition from the crypto community and lawmakers, leading to efforts to overturn it in Houses of Congress.
However, President Biden invoked the Congressional Review Act to nullify the resolution that sought to please crypto investors. In a statement issued by the White House, the President took a stand about his decision, stating, “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.”
He added, “My Administration is eager to work with Congress to ensure a comprehensive and balanced regulatory framework for digital assets, building on existing authorities, which will promote the responsible development of digital assets and payment innovation and help reinforce United States leadership in the global financial system.”
Many in the crypto industry see this decision as a blow to the years-long efforts that brought institutional investors closer to digital assets, especially at a time when bitcoin ETFs (Exchange Traded Funds) saw approval from the SEC. The SEC is also working on blessing Ether ETFs soon, asking financial houses to submit their applications for issuing the product. The move to veto the accounting guidelines making it harder for institutions to invest in crypto assets comes as a polarizing move from the White House.
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