President Biden has fulfilled his promise to veto crypto legislation related to the SEC that recently passed both the House and Senate.

The bill aimed to reverse the SEC’s guidance, which states that certain companies should classify crypto assets as liabilities on their balance sheets, even if they are only holding the assets on behalf of customers.

In a letter addressed to the House of Representatives, President Biden explained that removing this guidance would hinder the SEC’s ability to implement safeguards and protect investors.

He stated, “SAB 121 reflects the well-considered technical views of SEC staff regarding the accounting obligations of firms that safeguard crypto-assets. By invoking the Congressional Review Act, this resolution led by the Republicans would inappropriately limit the SEC’s ability to establish appropriate regulations and address future concerns.”

President Biden emphasized that overturning the SEC staff’s judgment in this manner risks undermining the SEC’s broader authority over accounting practices. He made it clear that his administration would not support measures that put consumers and investors at risk.

He stressed the importance of implementing adequate regulations that protect consumers and investors while harnessing the potential benefits of crypto-asset innovation. President Biden expressed his eagerness to collaborate with Congress in order to establish a comprehensive and balanced regulatory framework for digital assets. He emphasized the need to build upon existing authorities to promote responsible development and payment innovation, ultimately strengthening the United States’ position in the global financial system.

The legislation, led by Republicans, was approved in the House with a vote of 228 to 182, with 21 Democrats in favor. It also passed in the Senate with a vote of 60 to 38, garnering support from eleven Democrats.

President Biden’s veto comes at a time when Bitcoin and crypto are under the political and regulatory spotlight. Former President Trump recently started accepting crypto donations, pledging his support for the industry and investors’ right to self-custody their assets.

Meanwhile, the SEC made an abrupt reversal on Ethereum ETFs, clearing the way for their imminent launch.

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