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Joe Biden Vetoes Overturn of SEC Crypto Policy

Key Takeaways

  • President Biden vetoed a resolution to overturn SEC's SAB 121;
  • SAB 121 mandates banks to list customers' digital assets on their balance sheets;
  • The crypto community responded critically to the veto, arguing it hinders innovation.
Joe Biden Vetoes Overturn of SEC Crypto Policy

President Joe Biden has vetoed a resolution to overturn the US Securities and Exchange Commission's (SEC) Staff Accounting Bulletin (SAB) No. 121.

The resolution to repeal the SEC's guidelines had previously garnered strong bipartisan support in Congress. The House of Representatives voted 228 to 182 in favor of the repeal, and the Senate followed with a 60 to 38 vote.

Despite these votes, Biden chose to uphold the guidelines, triggering discontent within the crypto community.

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The SAB 121 guidelines, which were set to take effect on April 11, mandate that banks include customers' digital assets on their balance sheets, a requirement criticized for hindering innovation.

In his May 31 letter explaining the veto, Biden emphasized the necessity of maintaining the SEC's authority. He wrote:

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.

Biden added that his administration is committed to collaborating with Congress to establish a balanced regulatory framework for crypto, enhancing the responsible development of digital assets and payment innovation, and thereby strengthening the US leadership in the global financial system.

The response from the crypto community was immediate and critical, with many expressing their frustration on social media platforms. Cody Carbone, chief policy officer at the Digital Chamber, described the veto as "a slap in the face to innovation and financial freedom."

Ripple CEO Brad Garlinghouse also criticized the decision, stating:

To say that this is incredibly disappointing from this White House - at an incredibly pivotal time - is an understatement.

The debate continues as the crypto industry grapples with the implications of this decision. Advocates for the repeal argue that the guidelines are overly restrictive, while supporters believe they provide necessary safety measures.

In other news, Senators Elizabeth Warren and Bill Cassidy have recently requested information from drug enforcement agencies on actions against the use of crypto in the fentanyl trade.

Aaron S., Editor-In-Chief
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.
Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.

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