President Biden Uses Veto to Keep SAB 121 Intact, Protects SEC’s Crypto Outreach

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As an analyst with a background in finance and experience following regulatory developments in the cryptocurrency industry, I strongly believe that President Joe Biden’s decision to veto the bill repealing SAB 121 is a necessary step to maintain financial stability and protect consumers. The SEC’s regulations are crucial for ensuring transparency and accountability in the rapidly evolving crypto market.

Although lawmakers urged President Joe Biden to annul the contentious SEC directive, known as SAB 121, he opted to reject their plea by vetoing the corresponding legislation instead.

What’s the SAB 121 Repeal for Crypto?

As a researcher looking back on events from last month, I can share that in May, both the House of Representatives and the Senate took actions to revoke the Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin 121 (SAB 121). The House passed this measure with a vote of 228 to 182. A significant number of Republicans supported it, but 21 Democrats also joined in the approval. Subsequently, the Senate voted for the repeal with a tally of 60-38. Notable Democrats like Senate Majority Leader Chuck Schumer from New York were among those who endorsed this decision.

During my address to the U.S. House of Representatives on May 31, I made it clear that my Administration will not back measures putting consumers and investors at risk. It is essential to establish adequate safeguards to ensure the benefits and prospects of crypto-asset innovation can be fully realized without compromising the security and financial well-being of individuals involved.

This declaration makes it evident that the Biden administration intends to keep the Securities and Exchange Commission (SEC) in control of cryptocurrency regulations. The White House also emphasized that restricting the SEC’s power to establish a robust regulatory structure for crypto-assets could lead to significant financial instability and market volatility.

Over the past year, the SAB 121 communique has sparked apprehensions within the cryptocurrency sector. Some stakeholders worry that this directive may discourage banks from providing crypto custodial services. According to the bulletin, crypto custody firms must list their customers’ digital asset holdings as liabilities on their financial statements. However, the Securities and Exchange Commission (SEC) has clarified that SAB 121 is merely “non-binding staff guidance,” intended to strengthen transparency for clients.

Will Lawmakers Overturn Biden’s Veto?

To override a veto, a two-thirds majority is required in the Senate and House of Representatives. A veto may not win him additional support, but it could potentially lead to losing the votes of approximately 500 citizens in Wisconsin, Michigan, Pennsylvania, Arizona, and Nevada.

This is a dumb hill for Biden to die on

Veto will earn exactly 0 votes— but will likely cost him 500 votes in WI, MI, PA, AZ and NV

— Jeff Roberts (@jeffjohnroberts) May 31, 2024

In a response to the White House’s decision to revoke SAB 121, Ripple CEO Brad Garlinghouse expressed his deep disappointment, stating: “This move by the White House comes at a crucial juncture and the level of disappointment cannot be overstated.”

He added: “If the Biden administration is actually serious about a shift (and finally waking up to the crypto electorate) – the single most important thing they can do is demand the resignation of Gary Gensler”.

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2024-06-01 06:41