Key Takeaways
- The crypto community has largely derided Joe Biden’s move to veto the SAB 121 repeal bill.
- The bill would have blocked a controversial SEC policy.
- Critics argue that SAB 121 prevents banks from holding crypto for their customers.
Joe Biden has vetoed a Congressional bill seeking to overturn “SAB 121” — a Securities and Exchange Commission (SEC) bulletin that requires cryptocurrency custodians to record customers’ holdings as liabilities on their balance sheets.
The move has drawn broad condemnation from the crypto community, which views SAB 121 as part of the SEC’s efforts to stifle the industry.
Community Laments “Anti-Crypto” SAB 121
Despite Congress’ best efforts to consign SAB 121 to history, thanks to Biden’s veto, the controversial staff accounting bulletin is back in play.
Crypto investor and entrepreneur Ryan Sean Adams called SAB 121 “an anti-crypto rule put in place by Gensler’s SEC to stop banks from holding crypto.”
Meanwhile, Galaxy CEO Mike Novogratz said the outcome was “disappointing” and played directly into the hands of Donald Trump as he tries to position himself as the crypto candidate in November’s presidential elections.
Unsurprisingly, some of the fiercest criticism came from the Republican party.
Senator Cynthia Lummis, who played a key role in efforts to repeal the bulletin, utterly condemned Biden’t intervention.
“Congress gave this administration the opportunity to correct its position on crypto assets,” she stated. “But instead of listening to the will of the American people and reining in the SEC, President Biden doubled down on his administration’s failed policies at the expense of American consumers.”
Veto Further Alienates Crypto Voters
In an election year where Republicans have found it all too easy to depict Democrats as overzealous crypto hawks who are stifling American innovation, Biden’s veto risks further alienating crypto-friendly voters.
And neither is crypto policy simply a partisan matter.
After Democrats in both the House and the Senate (including Senate majority leader Chuck Schumer) broke ranks to vote in favor of the SAB 121 repeal bill, Biden looks increasingly isolated even in his own party as lifelong Democrats have started to express their concerns.
“Right now, they’re kind of letting Trump own this issue,” former Biden advisor Moe Vela commented to CCN.
“The regulatory environment for crypto right now is in shambles. It’s practically non-existent,” he observed. However, he cautioned against assuming that a Trump presidency would be a silver bullet for the crypto sector.
Crypto Voters Back Trump
Some traditional Democrats are moving toward the Trump camp over the current administration’s crypto policy.
Republicans overwhelmingly voted to slash SAB 121 while Democrats, including the President, have mostly thrown their support behind the SEC.
Whether the issue will meaningfully impact support for Biden remains to be seen. But some voters have already turned away from the President over his crypto policy, which isn’t a good sign in an election that a razor-thin margin of victory could decide.
James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
