Biden Blocks Legislation Against SEC Crypto Rules

Joe Biden, the U.S. President, vetoed a measure aiming at reversing a contentious Securities and Exchange Commission bulletin defining accounting rules for companies handling cryptocurrencies.

“My administration will not support measures that jeopardize the well-being of consumers and investors,” stated President Biden in a letter issued to the U.S. House of Representatives and uploaded to the White House website. “Appropriate guardrails that protect consumers and investors are necessary to harness the possible benefits and opportunities of crypto-asset invention.”

Related: Bitcoin’s Growing Influence in U.S. Elections

The legislation to eliminate the staff accounting bulletin of the Securities and Exchange Commission, sometimes known as SAB 121, passed the House and Senate earlier this month. Originally voting 228–182 to approve the legislation, the House consisted largely of Republicans, while 21 Democrats did sign on. A week later, some Democrats—including Senate Majority Leader Chuck Schumer, D-N.Y.—voted in favor of the proposal as the Senate voted 60 to 38.

Related: U.S. Senate Votes 60-38 to Overturn SEC Crypto Rule

Overcoming a veto calls for a two-thirds majority from both chambers of Congress.

In a “statement of administration policy” issued by the White House last month, President Biden declared he would reject the bill. The White House specifically declared 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 has vetoed laws before that the Senate and House approved with bipartisan support. For instance, Bloomberg Law reports that the president rejected a resolution in May to reverse a joint employer rule enacted by bipartisan margins by both the Senate and the House.

Concerns in the crypto sector that the bulletin could hinder banks from securing digital assets have generated debate over the past year. Companies that hold bitcoin have to note consumer crypto holdings as liabilities on their balance sheets.

“Time and again, we have seen crypto firms fail and watched as their customers lined up at the bankruptcy court in hopes of getting what they thought was legally theirs,” an SEC spokesman said in a statement to The Block last month. “We have also witnessed the dangers to investors in companies that conceal these assets off the balance sheet. These revelations give investors a vital line of sight into the degree of risk crypto custodians take.”