In a significant development for the cryptocurrency industry, President Joe Biden of the United States has rejected crypto legislation (SAB 121) that pertains to the Securities and Exchange Commission (SEC). The bill was recently passed in both the American House and Senate. With these recent developments in the US, Biden’s veto has placed Bitcoin and the cryptocurrency industry in the political and regulatory spotlight.
The proposed legislation aims to revoke Staff Accounting Bulletin (SAB) No. 121 of the SEC, which establishes strict guidelines for financial institutions regarding the custody of digital assets. The bill seeks to reverse the SEC’s guidance on labeling crypto assets as liabilities on company balance sheets.
In a letter to the House of Representatives explaining his decision, Biden emphasized that withdrawing the guidance would hinder the regulator’s ability to implement safeguards and protect investors.
“The SAB 121 reflects the well-considered opinions of SEC technical staff regarding the accounting obligations of certain companies that hedge cryptoassets. By invoking the Congressional Review Act, this resolution led by the Republicans would unduly restrict the SEC’s ability to establish sufficient safeguards and address future issues. Reversing the SEC staff’s well-considered judgment risks undermining the SEC’s broader authorities concerning accounting practices. My Administration will not support measures that jeopardize the well-being of consumers and investors,” he wrote.
Furthermore, President Biden highlighted the commitment to working jointly with Congress to develop a regulatory framework for the sector. “We need adequate safeguards that protect consumers and investors to fully realize the potential benefits and opportunities of innovation in crypto assets. My administration is eager to collaborate with Congress to establish a comprehensive and balanced regulatory framework for digital assets. Building on existing authorities, this framework will promote responsible development of digital assets and innovation in payments, while also strengthening the position of the United States in the global financial system.”
It is worth noting that the White House, under President Joe Biden’s administration, recently expressed strong opposition to the bill HJ Res. 109. This proposed legislation would allow heavily regulated financial companies to act as custodians of cryptocurrencies, including Bitcoin. The administration argued that such a move would compromise the SEC’s efforts to protect investors and ensure the security of the broader financial system. The Executive Office of the President stated, “If presented with HJ Res. 109, President Biden would veto the bill.”
Disclaimer: The views and opinions expressed by the author or any individuals mentioned in this article are solely for informational purposes and do not constitute financial, investment, or other advice. Investing or trading in cryptocurrencies carries the risk of financial loss.
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