President Biden vetoed bill to deregulate crypto custody

On May 31, President Joe Biden announced his veto of the bill H.J.Res. 109 to repeal the SEC's crypto custody regulation SAB 121. According to SAB 121, banks and cryptocurrency custodians will have to record these assets as liabilities.

As reported, the US House of Representatives passed the H.J. Res 109 aimed to veto regulation SAB 121 on May 9, then this crypto custody regulation was also voted down by the Senate with a significant margin, 60-38 votes against.

SAB 121 is a regulation introduced by the SEC in 2022 that prohibits banks from participating in the custody of cryptocurrencies on behalf of customers, as well as requiring other financial companies that hold users' crypto to register here. is a liability on the balance sheet.

SAB 121 policy invisibly prevents financial institutions from being exposed to crypto if they do not want to spend a large amount of capital to ensure their books are balanced.

In an official announcement sent on May 31, US President Joe Biden vetoed the bill H.J.Res. 109 of Congress to repeal SEC policy SAB 121.

Accordingly, Mr. Biden said that the veto decision was carefully considered, H.J.Res. 109 threatens to weaken the SEC's authority to maintain a comprehensive financial regulatory framework for cryptocurrencies, causing instability and lack of control in the market. The President emphasized the letter:

“My administration will never support actions that could threaten the safety of consumers and investors.”

The Biden administration seems to maintain its previous position with the goal of building a legal framework for digital assets and asserting that applying measures to ensure safety for consumers and investors is important. extremely necessary.

President Biden issued the veto just hours after he received two letters from banking groups and members of Congress urging him to approve the resolution repealing SAB 121.

The President's veto announcement was immediately met with a lot of criticism from the cryptocurrency community and lawmakers.

The Blockchain Association in America expressed disappointment when Biden rejected the consensus of the majority of members of both parties on the losses that could be created by SAB 121.

US Senator Cynthia Lummis said that the Joe Biden administration is trying to circumvent the law to take over a market that they have no right to manage and said that the Congressional voting process is completely meaningless when everything has been done. decided in advance by Biden.

Famous investor Ryan Sean Adams asserts that SAB 121 is an anti-crypto rule introduced by the SEC to prevent banks from holding cryptocurrencies and this decision will cost the Biden administration in the Presidential election. system in November.

Ripple's CEO also expressed disappointment in the White House at such a critical time as now.

However, after the President of the United States vetoes a bill, Congress can still pass it if there is at least a two-thirds vote in favor from both the House and Senate.

Although the Joe Biden administration had previously approached the cryptocurrency community for its re-election campaign, Biden's move gave too much management power to the SEC, showing a desire to take over the market. crypto into your hands. This loses the inherent decentralization of the cryptocurrency market and there is a high possibility that the crypto community will turn against this president in the upcoming election.