U.S. President Joe Biden vetoed a congressional resolution that would strike down US Securities and Exchange Commission (SEC) guidance that the crypto industry says has stymied its ability to work with banks.
The guidance — known as staff accounting bulletin No. 121 — [which requires firms that custody crypto to record customer crypto holdings as liabilities on their balance sheets] has also drawn pushback from banks since it was published in 2022. Lenders have said it effectively restricts them from scaling up services to hold digital assets on behalf of customers by making it too costly.
The resolution - which passed the Senate with the support of 11 Democrats - would have invalidated the SEC bulletin. Lawmakers backing the resolution, which passed the House in a 228-182 vote, said the guidance limits options for Americans who want to stow digital assets at traditional banks.
“My administration will not support measures that jeopardize the well-being of consumers and investors,” Biden said in a veto message released Friday evening. “Appropriate guardrails that protect consumers and investors are necessary to harness the potential benefits and opportunities of crypto-asset innovation."
In his statement, Biden added that he was “eager to work with the Congress to ensure a comprehensive and balanced regulatory framework for digital assets.”
While the White House earlier this month said it opposed legislation that passed the House establishing a regulatory framework for digital assets — arguing it lacked sufficient consumer and investor protections — it stopped short of a full veto threat, indicating the president was open to negotiations on legislation governing the issue.