Biden imposes his veto despite Congress’ vote on the crypto project

In a blow to the cryptocurrency sector, US President Joe Biden has vetoed the cancellation of the SEC’s controversial accounting bulletin, claiming that the regulation is necessary to protect investors.

Biden maintains his Veto against the bill overturning the SEC’s SAB 121

The president American Joe Biden a vetoed a joint resolution of the Congress to cancel Accounting Bulletin 121 (SAB 121) of the Securities and Exchange Commission (SEC). This controversial SEC requires companies that hold cryptocurrencies on behalf of their customers to account for these digital assets as “liabilities” on their balance sheets. This requirement has been strongly criticized by the crypto industry, which sees it as a brake on innovation.

In a letter to the House of Representatives, Chairman Biden justified his veto by stressing the imperative need to establish “appropriate safeguards” to protect crypto consumers and investors.

Robust safeguards for consumers and investors are essential to reap the full potential benefits of cryptocurrency innovation.

Joe Biden

Published in March 2022, the SAB 121 immediately stirred up controversy in the digital asset industry. Its critics denounce the directive as creating a major obstacle for financial institutions wishing to offer crypto-currency-related services. Indeed, the requirement to account for crypto assets held for their customers as “liabilities” on the balance sheet forces them to tie up significant equity capital.

Congress initially in favor of repealing SAB 121

However, the Congress had initially taken the opposite view of the presidential position. Earlier this month, the House of Representatives and the Senate both voted in favor of repealing the EU’s accounting directive. SEC.

In the House, 228 votes to 182 were in favor of repeal, with majority support from Republicans but also from 21 Democrats. In the Senate, the measure was approved by 60 votes to 38, with several influential Democrats, such as Majority Leader Chuck Schumer voting in his favor.

From now on, to override the presidential veto, a qualified two-thirds majority will be required in each chamber, a most unlikely scenario given the deep political divisions currently paralyzing Congress.

Biden had previously warned against any initiative aimed at limit the capacity of the SEC maintain a comprehensive and effective financial regulatory framework for digital assets.

This new tug-of-war between the administration and Congress on the regulation of digital assets risks weighing on the development of the American crypto ecosystem, which is currently unable to develop a clear, consensual regulatory framework. Although many elected officials wish to lighten the SEC’s oversight, the President believes that strict regulation remains essential to preserve investor protection.