President Joe Biden has vetoed H.J.Res. 109, a congressional resolution aimed at overturning the SEC’s current guidelines on how banks manage customers’ crypto assets. The resolution specifically targeted SEC’s Staff Accounting Bulletin 121, which mandates that banks treat crypto assets as liabilities. Banking groups have criticized this rule as prohibitively expensive, while regulators argue it’s necessary to protect investors following the collapse of high-profile crypto firms like FTX.
“SAB 121 reflects considered technical SEC staff views regarding the accounting obligations of certain firms that safeguard crypto-assets,” Biden stated. “This Republican-led resolution would inappropriately constrain the SEC’s ability to set appropriate guardrails and address future issues.”
Biden emphasized that his administration “will not support measures that jeopardize the well-being of consumers and investors.”
H.J.Res. 109 passed with mainly Republican support, though 21 House Democrats and Senate Majority Leader Chuck Schumer also backed it. Despite pressure from Representative Mike Flood, the resolution’s sponsor, Biden upheld his veto, citing overwhelming opposition to SAB 121 from groups like the American Bankers Association and Stand With Crypto.
“SAB 121 effectively precludes regulated banking organizations from offering digital asset custody at scale since it treats the assets as if they are owned rather than simply custodied by a banking organization,” the ABA and others argued in a letter to Biden.
The White House remains open to further discussions on crypto regulation. “My Administration is eager to work with Congress to ensure a comprehensive and balanced regulatory framework for digital assets,” Biden added, aiming to promote responsible development and maintain U.S. leadership in the global financial system.