President Joe Biden vetoed a bill aimed at overturning a contentious Securities and Exchange Commission (SEC) bulletin that sets accounting standards for firms handling cryptocurrency custody. In a letter to the U.S. House of Representatives, Biden emphasized the importance of maintaining safeguards to protect consumers and investors in the rapidly evolving crypto landscape.

"My Administration will not support measures that jeopardize the well-being of consumers and investors," Biden stated, underscoring the necessity of regulatory guardrails to harness the potential benefits of crypto-asset innovation. The decision comes despite bipartisan support in both the House and Senate to repeal the SEC's Staff Accounting Bulletin 121 (SAB 121).

The House initially passed the measure with a 228-182 vote, drawing support mainly from Republicans, while 21 Democrats also backed it. Later, the Senate voted 60 to 38 in favor, with several Democratic lawmakers, including Senate Majority Leader Chuck Schumer, supporting the bill. However, overturning Biden's veto would require a two-thirds majority from both chambers of Congress.

The White House had previously signaled Biden's intention to veto the bill, emphasizing the importance of maintaining the SEC's regulatory framework for crypto-assets. The administration expressed concerns that limiting the SEC's authority could lead to financial instability and market uncertainty.

This isn't the first time Biden has vetoed bipartisan legislation. In May, he vetoed a measure aimed at overturning a joint employer rule, despite bipartisan support in Congress.

SAB 121 has been a source of controversy within the crypto industry, with concerns raised that it could hinder banks' ability to safeguard digital assets. The bulletin mandates firms handling crypto custody to record customer holdings as liabilities on their balance sheets, a move intended to enhance investor disclosures.

The SEC defended SAB 121 as non-binding staff guidance aimed at providing greater transparency to investors. According to an SEC spokesperson, the bulletin is crucial for mitigating risks to investors and ensuring accountability among crypto custodians.

Despite opposition from some quarters, Biden's decision to uphold SAB 121 underscores the administration's commitment to maintaining regulatory oversight in the crypto space to protect consumers and investors alike.