Biden Vetoes Resolution to Overrule SEC’s Crypto Accounting Rule

United States President Joe Biden has vetoed a resolution that aimed to overturn the U.S. Securities and Exchange Commission (SEC) Staff Accounting Bulletin (SAB) No. 121. This decision quickly drew criticism from the cryptocurrency industry.

“We’re disappointed that the administration chose to overrule bipartisan majorities in both Houses of Congress who recognized the harm created by SAB 121,” stated the Blockchain Association, a crypto advocacy group, in a May 31 post on X (formerly Twitter). Biden argued that challenging the proposed guidelines would compromise the SEC’s authority.

SEC’s Authority at Stake

Biden expressed concerns about undermining the SEC’s authority in an official May 31 letter. “This reversal of the considered judgment of SEC staff in this way risks undercutting the SEC’s broader authorities regarding accounting practices,” he wrote. The SEC’s guidelines require institutions that hold crypto assets to record these holdings as liabilities on their balance sheets.

“My Administration will not support measures that jeopardize the well-being of consumers and investors,” Biden added.

Backlash from the Crypto Community

The guidelines were set to take effect on April 11 but faced significant backlash from both the crypto community and lawmakers.

In the House of Representatives, lawmakers voted 228 to 182 to repeal the SEC’s guidance. The bill then moved to the Senate, where senators also voted to repeal SAB-121 by a margin of 60-38.

The wider crypto community expressed their frustration on social media, arguing that the decision stifles innovation and hinders the industry during a critical time.

“This is a slap in the face to innovation and financial freedom,” said Cody Carbone, chief policy officer of the Digital Chamber, in a May 31 post on X.

Ripple CEO Brad Garlinghouse added, “To say that this is incredibly disappointing from this White House – at an incredibly pivotal time – is an understatement.”