Capping off a dizzying week in both crypto and political spheres, U.S. President Joe Biden on Friday notified Congress that he has vetoed a bipartisan-passed resolution that sought to roll back a Security and Exchange Commission that critics said discouraged banks from offering crypto custody services.
“This reversal of the considered judgment of SEC staff in this way risks undercutting the SEC’s broader authorities regarding accounting practices.” reads the notice from the White House. “My Administration will not support measures that jeopardize the well-being of consumers and investors.
“Therefore, I am vetoing this resolution,” Biden concludes.
The battle over Staff Accounting Bulletin (SAB) 121—which is separate from the Financial Innovation and Technology for the 21st Century Act, or FIT21—has been brewing for more than a year. Biden had signaled his intent to veto the legislation on the day that it was passed by the U.S. House of Representatives in a 228-182 bipartisan vote.
The Senate followed suit with its companion resolution, with 12 Democrats joining most Republicans in voting to repeal the policy 60 to 38.
In his veto notice, Pres. Biden faulted the bill for citing the Congressional Review Act as the basis of the oversight lawmakers claimed in their objections—as he did when he first expressed opposition to the bill.
“This Republican-led resolution would inappropriately constrain the SEC’s ability to set forth appropriate guardrails and address future issues,” the president wrote today.
On May 8, he asserted that “limiting the SEC’s ability to maintain a comprehensive and effective financial regulatory framework for crypto-assets would introduce substantial financial instability and market uncertainty.”
Biden signaled that he would be open to work with Congress on a “balanced regulatory framework for digital assets.” That’s the ostensible goal of the FIT21 Act, which Biden also opposes—but he has not threatened a veto, as he did with SAB 121.
The FIT21 Act creates a federal framework for the regulation of digital assets, and was passed by the U.S. House last week with the support of 71 Democrats and all but three Republicans—demonstrating that the issue is potent enough to prompt lawmakers to cross party lines.
The announcement comes the day after former president Donald Trump—and presumed Republican rival in the upcoming presidential election in November—was convicted in a New York court on all 34 criminal counts levied against him. Trump has recently pivoted to court the crypto vote as it becomes an increasingly potent campaign issue.
