President Biden says he will reverse SEC ruling against crypto regulation.

US President Joe Biden's office announced in a statement to lawmakers and the public that the administration plans to veto a joint resolution affecting crypto policy at the Securities and Exchange Commission (SEC) if it comes to the table.

In a May 8 statement, the White House said it “strongly opposes” House members seeking to pass a joint resolution that would thwart the SEC's efforts to “protect investors in crypto-asset markets and protect the broader financial system.” HJRes 109, which was introduced in the House in February, overturns SEC Staff Accounting (SAB) No. 121, which requires banks to put customers' digital assets on the books, and capital is maintained on them.

“SAB 121 is a response to technological, legal and regulatory threats that have caused significant losses to consumers,” the Biden administration said. “Congressional review by invoking legislation could unduly limit the SEC's ability to ensure appropriate safeguards and future issues related to crypto-assets, including financial stability. Limiting the SEC's ability to establish a comprehensive and effective financial regulatory framework for crypto-assets would introduce greater financial instability and market instability.” .

Democratic and Republican leaders of the House Financial Services Committee took to the House floor on May 8 to comment on the resolution. Representative Patrick Henry, a Republican, urged lawmakers to support HJRes. 109, SAB 121 authorized the SEC to “determine how financial institutions and companies protect Americans' digital assets.”

Update: The House voted to reject the SEC's anti-crypto banking directive SAB 121

“If Americans want to engage with digital assets in a safe and secure way — banks — some of the most regulated businesses in our country — are probably the best way to go,” said Representative McHenry.

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Representative Maxine Waters, a Democrat and a member of the House Appropriations Committee, opposed the joint resolution, saying the SEC's accounting regulation would allow for more transparency in the digital asset space. She reiterated claims in the SEC guidance that the law is intended to address the “unique risks and uncertainties” associated with cryptocurrencies and called McHenry's efforts “harmful” and “partisan.”

“This kind of transparency will help prevent fraud and abuse of crypto assets, which has led to the collapse of major crypto companies like FTX,” said Rep. Waters.

After considering the house in HJRes. 109 appeared to pass on a voice vote, with Rep. McHenry asking that the yeas and nays not count. The Speaker of the House adjourned the proceedings “until further notice” on the resolution. Under the United States Constitution, the House can override President Biden's veto with a two-thirds vote.

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