Biden Vetoes Resolution to Overturn SEC’s SAB 121

U.S. President Joe Biden vetoed a document that would allow regulated companies, including banks, to hold cryptocurrency on their balance sheets.

The document in question is the Staff Accounting Bulletin 121 (SAB 121) from the U.S. Securities and Exchange Commission (SEC).

“SAB 121 reflects the SEC staff’s considered view on the accounting obligations of certain firms safeguarding crypto assets. […] This Republican-led resolution would unjustifiably limit the SEC’s ability to establish appropriate protections and address future issues,” the statement reads.

In his letter, Biden noted that his administration “will not support measures that jeopardize the well-being of consumers and investors.”

Hours before the president’s decision, groups lobbying for major banks sent him a letter urging him not to veto the resolution.

“SAB 121 effectively prohibits regulated banking organizations from offering digital asset custody at scale, as it considers them as owned rather than merely held by the banking organization. […] Institutions forced to record digital assets held on their balance sheets are subject to higher capital, liquidity, and other prudential requirements compared to their non-bank competitors,” the statement reads.

On May 30, Senator Cynthia Lummis, Representatives Patrick McHenry, Tom Emmer, and others sent their own letter to Biden with the same message—do not veto.

On May 16, the U.S. Senate passed a joint resolution annulling SAB 121. On May 8, the White House administration announced the president’s readiness to veto the bill.

Biden’s advisors emphasized that repealing the directive would hinder the SEC’s ability to “protect investors in cryptocurrency markets and ensure the safety of the entire financial system.”

SAB 121 was issued in April 2022. The document provides guidelines for the custody of cryptocurrencies. Specifically, banks must reflect them on their balance sheets, making the process costly and limiting institutions’ ability to offer custodial services on a large scale.

In February 2024, four industry organizations appealed to the SEC to ease SAB 121. Commissioner Hester Peirce described the Bulletin’s provisions and related guidance as “a pernicious weed.”

In May, Cardano co-founder Charles Hoskinson claimed Biden aims to destroy the crypto industry in the U.S.

Uniswap suggested that the current head of state might lose the upcoming election due to his administration’s dismissive attitude towards the cryptocurrency market.

According to a Paradigm survey, 48% of voters holding digital assets plan to vote for Donald Trump in the November election. 38% prefer Biden, while 13% remain undecided.