Crypto community divided as Biden vetoes repeal of SEC’s SAB 121

• Biden’s veto of SAB 121 repeal reflects caution amid bipartisan support.
• Bitwise CEO sees Biden’s decision as aligned with sensible crypto development.

In a surprising move, despite bipartisan support, U.S. President Joe Biden has vetoed the repeal of Staff Accounting Bulletin 121 aka SAB 121.

SAB 121 is the SEC’s controversial accounting guidelines seen as unfavorable to cryptocurrency. Critics argue that it deters investment banks from providing large-scale cryptocurrency custody services.

The story so far

On 16th May, in a rare display of bipartisanship, both Democrats and Republicans united to vote in favor of repealing SAB 121, passing the resolution with a 60-38 vote. 

Earlier, the White House had warned that repealing this policy could undermine the SEC’s ability to protect cryptocurrency investors.

The administration even went as far as to signal that President Joe Biden would veto the repeal if necessary, and on 1st June, he did just that. 

Biden’s veto met with disappointment

This decision disappointed many who view these guidelines as harmful, as it contradicts the majority opinion in both the House and Senate.  

Providing further insights on the SEC’s overreach and Congress’s progress toward regulation, the Blockchain Association noted,

Biden’s reason behind his bold move 

In his defense, Biden responded to Congress’ vote to repeal the cryptocurrency accounting guidelines with an official letter on 31st May and said, 

“This reversal of the considered judgment of SEC staff in this way risks undercutting the SEC’s broader authorities regarding accounting practices.” 

He further added, 

“My Administration will not support measures that jeopardize the well-being of consumers and investors.”

Taking his words with a pinch of salt, Cardano’s co-founder, Charles Hoskinion took to X and noted, 

“The War on Crypto Continues.” 

Sharing the same line of thought was the CEO of Galaxy Digital, Mike Novogratz who said, 

Not everyone is on the same page!

However, not everyone was disappointed with Biden’s stance on this matter. For instance, Bitwise CEO Hunter Horsley had earlier noted,

“U.S lawmakers want to foster sensible development of crypto in the U.S. Not some lawmakers. The majority. 2024 is the beginning of the mainstream era.”

Therefore, while Congress shows increasing interest in crypto, the White House remains cautious about its implications. 

With President Biden going against Congress to veto the repeal of SAB121, it’ll be interesting to see how it affects his campaign in the upcoming presidential elections.