President Joe Biden recently vetoed a resolution aimed at overturning the U.S. Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin (SAB) No. 121. Biden argued that challenging the proposed guidelines would compromise the SEC’s authority, leading him to veto the resolution. In an official letter on May 31, Biden explained his decision, stating that reversing the SEC staff’s considered judgment in this manner could undermine the SEC’s broader authorities regarding accounting practices. The controversial accounting guidelines, set to take effect on April 11, required institutions that custody crypto assets to record crypto holdings as liabilities on their balance sheets. However, they faced significant backlash from the crypto community and lawmakers.
The decision to veto the resolution has drawn frustration from the wider crypto community, as many argue that it stifles innovation and hampers the industry during a critical time. The Blockchain Association, a crypto advocacy group, expressed disappointment in the administration’s choice to overrule bipartisan majorities in both houses of Congress who recognized the harm caused by SAB 121. Likewise, Cody Carbone, the Digital Chamber’s chief policy officer, stated that it was a “slap in the face to innovation and financial freedom.” Ripple CEO Brad Garlinghouse added that the decision was incredibly disappointing and came at a pivotal time for the industry.
Last week, the US House of Representatives approved a comprehensive bill known as the Financial Innovation and Technology for the 21st Century Act (FIT21). The bill aims to establish regulatory frameworks for digital asset markets, marking a huge win for the industry. The FIT21 bill secured a 279-136 vote, with both Democrats and Republicans supporting the measure. It intends to establish a regulatory regime for US crypto markets, introduce consumer protections, designate the Commodity Futures Trading Commission (CFTC) as a key regulatory authority for digital assets and non-securities spot markets, and provide clearer definitions of what constitutes a security or a commodity in the crypto token realm.
According to reports, Patrick McHenry, House Financial Service Committee chairman, is pushing the Senate to advance the FIT21 crypto legislation before the US elections. McHenry stated that the House’s approval of crypto market structure legislation is a “wakeup call” to take swift action. He also emphasized that Senate Majority Leader Chuck Schumer’s support and backing are important, particularly for stablecoin regulations. Overall, the approval of the FIT21 bill by the House represents a significant step forward in establishing regulatory frameworks for digital asset markets in the United States.
The veto of the resolution to nullify SAB 121 by President Joe Biden has sparked controversy within the crypto community. While some argue that the decision protects consumers and investors, others believe it hampers innovation and financial freedom. The administration’s choice to overrule bipartisan majorities in both houses of Congress and veto the resolution has disappointed many in the industry. The FIT21 bill, on the other hand, represents a positive development for the industry, as it aims to establish regulatory frameworks for digital asset markets and introduce consumer protections. With bipartisan support, the bill has the potential to bring more clarity and stability to the US crypto markets.
