Capping a confusing week in crypto and politics, U.S. President Joe Biden told Congress on Friday that he rejected a bipartisan resolution seeking to roll back a bipartisan Security and Exchange Commission resolution that critics say will encourage banks not to offer crypto custody services.
“This overturning of presumptive judgments against SEC employees in this manner would jeopardize the SEC's broad powers to exercise accounting practices.” reads a White House announcement. “My administration will not support actions that jeopardize the safety of consumers and investors.
“I therefore reject this decision,” Biden concluded.
The battle over Staff Accounting Bulletin (SAB) 121 — the Financial Innovation and Technology Act for the 21st Century, or FIT21 — has been simmering for more than a year. Biden signaled his intention to veto the bill on the day it was passed by the US House of Representatives in a 228-182 bipartisan vote.
The Senate voted 60 to 38 to repeal the policy, with 12 Democrats joining a majority of Republicans in favor of the resolution.
In the veto notice, Pres. Biden faulted the bill by citing the Congressional Review Act, which he said in his opposition to regulatory lawmakers — as he did when he first vetoed the bill.
“This Republican-led proposal would unduly limit the SEC's ability to develop appropriate safeguards and address future problems,” the president wrote today.
On May 8, he said that “limiting the SEC's ability to provide a comprehensive and effective financial regulatory framework for crypto-assets would introduce greater financial instability and market instability.”
Biden indicated he would be open to working with Congress on a “balanced regulatory framework for digital assets.” That's the clear goal of the FIT21 bill, which Benden opposes—but doesn't threaten a veto like he did with SAB 121.
The FIT21 Act, which creates a federal framework for regulating digital assets, was passed in the U.S. House of Representatives last week by 71 Democrats and all but three Republicans, a sign that the issue is strong enough to push lawmakers across party lines.
The announcement comes a day after former President Donald Trump and his presumptive Republican presidential contender were indicted in a New York court on all 34 criminal charges. Trump has recently taken the crypto vote to court as it has become an increasingly popular campaign issue.
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