US President Joe Biden vetoed Congressional Resolution HJ Res.109, which seeks to repeal the US Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin (SAB) No. 121, a measure of he controversial orientation and widely considered anti-crypto. Interestingly, Biden’s action comes amid rumors that the incumbent government was claiming to win favor with crypto voters in the upcoming US general elections.
Repealing SAB 121 would jeopardize investors’ interests, Biden says
On March 31, 2022, the SEC introduced SAB 121 which directed all financial institutions that hold cryptocurrencies for their customers to consolidate these assets on their balance sheet, thereby preventing these companies from protecting these digital assets.
SAB 121 has received widespread criticism for its perceived anti-crypto nature. It was also seen as a controversial direction that allowed the SEC to bypass the normal steps of its regulatory policy, which often included comments from affected stakeholders on any proposed rulemaking.
Earlier in May, the U.S. Congress repealed SAB 121, with the House voting 228-182 and the Senate 60-38 in favor of rescinding the SEC staff report card. However, Biden has now rejected this resolution citing several reasons.
First, Biden said repealing said guidance would “inappropriately” harm the SEC’s ability to put in place the right regulatory systems and address future problems. Additionally, the US president said the proposed resolution could expose US investors to certain harms and risks.
Biden said:
My government will not support measures that endanger the well-being of consumers and investors. Appropriate safeguards protecting consumers and investors are necessary to exploit the potential benefits and opportunities of crypto-asset innovation.
The president also commented on the lack of clear federal rules and regulations for the crypto space. He said:
My Administration looks forward to working with Congress to ensure a comprehensive and balanced regulatory framework for digital assets, building on existing authorities, that will promote responsible digital asset development and payments innovation and help to strengthen U.S. leadership in the global financial system.
Is the Biden administration returning to its “default” crypto policy?
Amid the sudden approval of the Ethereum spot ETF, among other events, there has been speculation that the current administration may be softening its stance on the use of digital assets. However, Biden’s recent action is likely to cast doubt on these beliefs.
It is widely expected that US crypto users (estimated at 46 million) will seek to make an impact in the October elections to protect their interests under the current hostile regulatory regime.
It remains largely to be seen, however, whether the Biden administration intends to persuade these voters. Former President Donald Trump, Biden’s direct opponent and a former critic of Bitcoin. started to plead for the development of cryptocurrencies in the United States.
Featured image of the White House, chart from Tradingview
