Biden's Veto of SEC's SAB 121 Repeal Divides Crypto Community

In a surprising move, President Joe Biden vetoed the repeal of the SEC's Staff Accounting Bulletin 121 (SAB 121) despite bipartisan support. SAB 121 is a controversial set of SEC accounting guidelines criticized for deterring investment banks from offering large-scale cryptocurrency custody services.

1. Background

On May 16, Democrats and Republicans united to pass the repeal of SAB 121 with a 60-38 vote. The White House had warned that repealing SAB 121 could undermine the SEC’s ability to protect cryptocurrency investors and indicated that Biden would veto the repeal if necessary, which he did on June 1.

2. Reactions to the Veto

Biden's decision disappointed many who view SAB 121 as harmful and contrary to the majority opinion in both the House and Senate. The Blockchain Association commented on the SEC’s overreach and the ongoing efforts toward regulation. Biden defended his decision, stating that reversing the SEC staff’s judgment could weaken the SEC’s broader authority on accounting practices and emphasized his administration's commitment to protecting consumers and investors.

3. Crypto Community's Response

Cardano co-founder Charles Hoskinson and Galaxy Digital CEO Mike Novogratz expressed their discontent, framing Biden's decision as part of a broader "war on crypto." However, some, like Bitwise CEO Hunter Horsley, supported Biden's cautious approach, noting that U.S. lawmakers want to foster sensible crypto development.

While Congress shows increasing interest in supporting cryptocurrency, the White House remains cautious about its implications. Biden's veto of the SAB 121 repeal could impact his stance in the upcoming presidential elections, highlighting the ongoing division within the crypto community.