As a seasoned crypto investor with a deep understanding of the regulatory landscape, I’m disheartened by President Biden’s decision to veto the resolution aimed at repealing SAB 121. This accounting guideline has been a thorn in the side of the crypto industry for years, forcing financial institutions to record digital assets as liabilities, which can be burdensome and deter investment.
On Friday, President Joe Biden blocked a congressional resolution aimed at repealing Securities and Exchanges Commission (SEC) Staff Accounting Bulletin No. 121 (SAB 121), sparking swift backlash from the cryptocurrency sector.
The SEC’s directive to withdraw SAB 121 received backing from lawmakers in the House of Representatives and Senate, with votes of 228 against 182 and 60 against 38 respectively, to revoke this bulletin. SAB 121 is a set of accounting instructions for financial entities managing cryptocurrencies, requiring them to classify digital assets as liabilities on their balance sheets.
The law creates obstacles for institutions attempting to engage with digital assets, potentially jeopardizing their collaborations with cryptocurrency firms. Initially slated for implementation on April 11, this legislation faced strong resistance from the crypto sector and legislators, prompting attempts in Congress to repeal it.
The President exercised his authority under the Congressional Review Act to overturn a resolution favoring crypto investors. In a White House statement, he explained his rationale, saying, “I am taking this action because reversing the SEC’s previous decision in such a manner could undermine its power to regulate accounting practices. My administration will not back policies that potentially harm consumers and investors.”
“My Administration is looking forward to collaborating with Congress to establish a thorough and fair regulatory structure for digital assets. This framework will be based on our current legal foundation, encouraging the responsible growth of digital assets and payment innovations while maintaining American dominance in the worldwide financial sector.”
As a researcher studying the crypto industry, I’ve noticed that many players in this field view the SEC’s decision to reject the proposed accounting guidelines as a setback to the years-long process of bringing institutional investors closer to digital assets. This comes at a particularly unfortunate time when bitcoin ETFs have recently gained approval from the SEC, and Ethereum ETFs are under consideration. The White House’s decision to veto these guidelines is seen as a polarizing move in the industry. Meanwhile, the SEC continues to accept applications for Ethereum ETFs from financial institutions, indicating their ongoing support for the integration of digital assets into traditional financial markets.
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2024-06-03 21:51