President Joe Biden has vetoed a resolution aiming to overturn a Securities and Exchange Commission (SEC) bulletin that critics argue restricts banks from offering crypto custody services. This move, seen as a defense of SEC authority, sparked sharp opposition from Republicans and Wall Street.
The resolution targeted Staff Accounting Bulletin (SAB) 121, which set forth guidelines impacting crypto custody services by banks. Critics claim this hampers innovation and restricts financial institutions' ability to manage crypto assets.
Despite bipartisan support for the resolution in Congress, Biden emphasized consumer and investor protection. Many experts disagree though.
The President's veto message underscored his administration's commitment to maintaining robust regulatory frameworks. He argued that overturning SAB 121 would undermine the SEC’s ability to ensure stable and transparent financial markets.
Biden’s decision came after the House passed the resolution with a 228-182 vote, followed by the Senate’s 60-38 approval. Notably, 12 Senate Democrats joined Republicans in supporting the resolution, highlighting bipartisan concern over the SEC's approach to crypto regulation.
The veto also occurs amid broader debates on the Financial Innovation and Technology for the 21st Century Act (FIT21), which proposes a comprehensive federal framework for digital assets. While Biden has expressed reservations about FIT21, he hasn’t threatened a veto, indicating potential for negotiation.
Former President Donald Trump’s recent conviction and his pivot to court the crypto vote further intensify the political dynamics surrounding this issue. As the 2024 election approaches, crypto regulation remains a significant point of contention between Democrats and Republicans.