Controversial SEC Crypto Policy Will Stay Thanks To President Biden

President Biden has vetoed legislation concerning crypto regulation that recently made its way through the House and Senate. The legislation aimed to counter guidance issued by the SEC, suggesting that specific companies should categorize crypto assets as liabilities on their balance sheets, even if they are merely holding the assets for clients.

Many, especially millennials and Gen Z, have argued that President Biden appears tone-deaf or out of touch with the youth of today due to his approach on certain policies, such as those related to student debt relief, climate change, and cryptocurrencies.

Biden Will Not Budge

In a communication to the House of Representatives, President Biden expressed concerns that removing this guidance would impede the capacity of the SEC to enforce protections for investors. He stated that SAB 121 represents the informed technical perspectives of SEC staff regarding the accounting responsibilities of certain firms safeguarding crypto-assets.

Through the Congressional Review Act, he continued, this resolution led by Republicans could unduly limit the ability of the SEC to establish suitable safeguards and address future challenges. President Biden stressed that this could also undermine the broader authority of the SEC on accounting practices.

Uncertainty Looms

President Biden advocated for a regulatory framework balancing consumer protection and innovation, expressing a readiness to collaborate with Congress on comprehensive digital asset regulations. The legislation, led by Republicans, secured passage in the House with 228 votes in favor and 182 against, with 21 Democrats supporting. In the Senate, it passed 60 to 38, with eleven Democratic votes.

Unsurprisingly, the veto coincides with heightened attention on Bitcoin and crypto, including former President Donald Trump and his recent acceptance of crypto donations which occurred around the same time as the sudden reversal on Ethereum ETFs by the SEC, clearing the path for their imminent launch.