Notes

Biden's Veto of SEC Crypto Standards Triggers Industry Reaction
I recently saw an article on Coinatory that outlined that U.S. President Joe Biden rejected a legislative effort to repeal an SEC bulletin. This bulletin sets accounting standards for firms that manage cryptocurrency, requiring them to record these assets as liabilities on their balance sheets.

In a letter dated May 31, Biden highlighted that reversing the SEC's deliberate decision could erode the commission's broader authority on accounting practices. The proposed bill sought to repeal the SEC's cryptocurrency accounting guidelines, which have been controversial since their introduction. These guidelines, especially SAB 121, mandate that financial institutions that hold crypto assets reflect customers' assets on their balance sheets, a move challenged for complicating the involvement of financial institutions with crypto companies.

Biden's government has been explicit about its position on consumer and investor protection. In his letter, Biden declared that his administration would not endorse measures that could compromise the well-being of consumers and investors. He highlighted the need for suitable guardrails to safeguard consumers and investors, which are vital to harness the possible benefits and opportunities of crypto-asset innovation.


Earlier in May, both the House and Senate decided to overturn the SEC's staff accounting bulletin. The House approved the measure with a 228-182 vote, primarily supported by Republicans, although 21 Democrats also were in favor. A week later, the Senate voted 60 to 38, with several Democrats, including Senate Majority Leader Chuck Schumer, endorsing the measure. However, rescinding a presidential veto needs a two-thirds majority in both houses of Congress, a difficult threshold to meet.

Biden's veto has elicited strong reactions from the cryptocurrency industry. The Blockchain Association, a crypto advocacy group, shared disappointment, noting that the administration chose to overrule bipartisan majorities in both Houses of Congress who acknowledged the harm created by SAB 121. Cody Carbone, Chief Policy Officer at the Digital Chamber, condemned the veto, calling it "a slap in the face to innovation and financial freedom."

Concerns have been voiced within the crypto community, particularly in light of speculations that Biden's campaign has been interacting with crypto industry leaders to take on a more pro-crypto stance. Moe Vela, Senior Advisor to Unicoin and former Senior Advisor to Biden, commended the potential engagement but warned against ignoring the importance of crypto to the nation's future. He stressed that crypto is here to stay and stressed the need for both presidential candidates to articulate their plans for incorporating crypto into the financial system.

Sheila Warren, CEO of the Crypto Council, also commented on the veto, expressing disappointment but not surprise. She noted that some positions, once publicly stated, can be challenging to retract, implying that the administration's stance on SAB 121 might be more about long-term strategic positioning than immediate policy changes.

This event underscores the ongoing tension between regulatory bodies and the cryptocurrency industry. The debate over SAB 121 emphasizes the challenges of integrating crypto-assets into traditional financial systems while ensuring consumer and investor protection. As Crypto regulations reported, the veto by Biden is a significant event in the evolving landscape of cryptocurrency regulation in the United States, reflecting broader concerns about innovation, financial stability, and regulatory authority.

My Website: https://coinatory.com/cryptocurrency-news/biden-vetoes-bill-challenging-secs-crypto-oversight-19465/