President Joe Biden recently vetoed a congressional effort to overturn a controversial crypto accounting policy established by the SEC. This move upholds his promise to reject a House Joint Resolution aimed at repealing the SEC’s Staff Accounting Bulletin 121 (SAB 121). The SEC policy mandates that financial firms list customer-held crypto assets on their balance sheets, a requirement critics argue complicates partnerships between financial institutions and crypto businesses.

Biden emphasized his commitment to consumer and investor protection, stating that using the Congressional Review Act to pass the Republican-led resolution would hinder the SEC's ability to implement necessary safeguards and address emerging issues.

Biden reiterated his willingness to work with Congress on legislation for the digital asset market, emphasizing the need for "appropriate guardrails" to protect consumers and investors.

Meanwhile, banking organizations and several Congress members sent two letters to Biden, urging him to approve the resolution overturning SAB 121. They argue the policy prevents regulated banks from offering custody services as per the Government Accountability Office. If Biden's veto persisted, they called for a cooperative effort with the SEC to revoke the guidance. Despite this, the resolution received substantial support in both congressional chambers.

Senator Ron Wyden, a Democrat and Biden ally who backed the resolution, stated at the Consensus 2024 conference that the guidance imposes a different standard on crypto compared to other financial assets.