Biden Uses Veto to Keep SAB 121 Intact

Protecting SEC’s Crypto Promotion

Despite lawmakers asking Joe Biden to repeal the controversial SEC Staff Accounting Bulletin 121 (SAB 121), Biden decided to veto the bill.

What does the repeal of SAB 121 mean for cryptocurrencies?

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Last month in May, the House and Senate voted to repeal the SEC’s Staff Accounting Bulletin, or SAB 121. The House passed the bill by a vote of 228 to 182, mostly supported by Republicans, but also with 21 Democrats. A week later, the Senate passed the repeal bill by a vote of 60 to 38, with several Democrats, including Senate Majority Leader Chuck Schumer, D-Calif., backing it.

On Friday, May 31, Joe Biden said in a speech to the U.S. House of Representatives: "My administration will not support measures that jeopardize the well-being of consumers and investors. Adequate guardrails to protect consumers and investors are essential to capitalizing on the potential benefits and opportunities of crypto-asset innovation."

From this statement, it can be seen that the Biden administration is willing to maintain the SEC's dominance in cryptocurrency regulation. The White House statement further added: "Limiting the SEC's ability to maintain a comprehensive and effective financial regulatory framework for crypto assets would create tremendous financial instability and market uncertainty."

Over the past year, the SAB 121 announcement has raised concerns, especially in the cryptocurrency industry. Many believe that the announcement will prevent banks from providing cryptocurrency custody services. The announcement requires cryptocurrency custodians to record their customers' cryptocurrency holdings as liabilities on their balance sheets. However, the SEC has been defending SAB 121, calling it "non-binding staff guidance" that strengthens disclosures to customers.

Will Lawmakers Override Biden's Veto?

Overriding a veto requires the support of a two-thirds majority vote in both the House and Senate. A veto would not win him any votes, but it could cost