Biden’s veto of SEC’s SAB 121 repeal causes rifts in the crypto community

• Biden’s surprising move in vetoing the repeal of SAB 121 receives mixed reactions.
• Bitwise CEO optimistic about Biden’s decision, sees it as a step towards sensible crypto growth.

In an unexpected turn of events, President Joe Biden has chosen to veto the repeal of Staff Accounting Bulletin 121 (SAB 121), despite bipartisan support.

SAB 121, the SEC’s controversial accounting guidelines, has been criticized for its negative impact on the cryptocurrency sector, hindering investment banks from offering large-scale custody services for digital assets.

The unfolding events

On May 16, both Democrats and Republicans joined forces in a rare display of unity to support the repeal of SAB 121, passing the resolution with a 60-38 vote.

Prior to this, the White House had expressed concerns that removing this policy could weaken the SEC’s ability to safeguard cryptocurrency investors.

Despite warnings, President Biden followed through on June 1 by vetoing the repeal.

Mixed reactions to Biden’s veto

Many were disappointed by Biden’s veto, as it goes against the prevailing sentiment in both the House and Senate.

Commenting on the SEC’s jurisdiction and Congress’s efforts toward regulation, the Blockchain Association observed,

Source: Blockchain Association/X

The rationale behind Biden’s bold decision

Defending his move, Biden cited the risk of undermining the SEC’s broader authority on accounting practices if SAB 121 is repealed, as stated in an official letter dated May 31.

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

He emphasized, 

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

While some, like Cardano’s Charles Hoskinion, criticized the decision as part of the ongoing “War on Crypto,” others, such as Galaxy Digital’s Mike Novogratz, echoed similar sentiments.

Source: Mike Novogratz/X

Differing opinions on Biden’s decision

While some may criticize Biden’s action, others, like Bitwise CEO Hunter Horsley, are optimistic about it, seeing it as a step towards promoting sensible development of cryptocurrency in the United States.

As Congress explores the realm of crypto with increasing interest, the cautious stance taken by the White House continues to shape the narrative. Only time will tell how Biden’s veto on SAB121 repeal will impact his electoral prospects in the upcoming presidential race.