Congress’s Crypto Custody Bill Vetoed by President Biden, SAB 121 Resolutely Protected

Key Points:

• President Biden vetoed Congress’s crypto custody bill to repeal SEC’s crypto guidance, SAB 121.
• Biden stressed the need for balanced regulation to protect consumers and encourage innovation.

President Joe Biden has vetoed a congressional attempt to repeal the U.S. Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin 121 (SAB 121), a move that was announced on Friday afternoon.

Biden Blocks Congress’s Crypto Custody Bill, SEC’s Crypto Guidance Stands

The Congress’s crypto custody bill aimed at revoking the SEC‘s guidance on crypto assets was met with resistance from the President, who considered it inappropriate and potentially harmful to consumers and investors.

The controversial SAB 121 directs financial institutions holding cryptocurrencies for customers to include these assets on their balance sheets. Critics argue that this requirement poses challenges for financial institutions collaborating with crypto companies.

President Biden, in a statement, emphasized the importance of maintaining “appropriate guardrails” to protect consumers and investors while harnessing the potential benefits of crypto asset innovation. He expressed willingness to collaborate with Congress on establishing a balanced regulatory framework for digital assets.

Bipartisan Push to Repeal SEC’s Crypto Policy

The Congress’s crypto custody bill to repeal SAB 121 gained momentum in both the House and the Senate, with bipartisan support. However, President Biden’s veto reflects his administration’s concerns regarding potential financial instability and market uncertainty that could arise from limiting the SEC’s regulatory authority in the crypto space.

Meanwhile, the crypto community has expressed frustration with the decision, citing concerns about stifled innovation during a critical period for the industry.

The veto comes amid broader political dynamics, including former President Donald Trump‘s recent legal troubles and his efforts to court support from the crypto community.