President Biden threw a curveball at the crypto industry, vetoing a bill designed to overturn a controversial accounting rule (SAB 121) targeting crypto custodians. This decision sparked outrage among crypto advocates, who see it as a roadblock to innovation.

The SAB 121 Saga: A Custody Conundrum

SAB 121, a thorn in the side of crypto institutions, mandated that they record crypto holdings as liabilities – a move seen by many as stifling growth. The backlash was swift, leading to a bipartisan effort in Congress to repeal the rule.

Lawmakers Take a Stand, But Biden Vetoes

Both the House and Senate overwhelmingly voted in favor of repealing SAB 121, but their efforts were thwarted by Biden's veto. In his official statement, Biden expressed concerns about undermining the SEC's authority over accounting practices.

Crypto Community Cries Foul

The crypto space erupted in frustration. Industry leaders like Brad Garlinghouse (Ripple CEO) and Cody Carbone (Digital Chamber) slammed the decision, viewing it as protectionist and harmful to innovation. The Blockchain Association echoed these sentiments, highlighting the disappointment of a veto that overruled bipartisan support for repeal.

A Silver Lining: The FIT21 Bill Marches On

Despite the SAB 121 setback, there's a glimmer of hope. The House of Representatives recently passed the FIT21 bill, a comprehensive piece of legislation designed to establish regulations for the digital asset market. This bill, if passed by the Senate, could provide much-needed clarity and consumer protection for the crypto industry.

The Road Ahead: Regulatory Tug-of-War

While the FIT21 bill offers some optimism, the SAB 121 veto highlights the ongoing tug-of-war between regulators and the crypto industry. As the US approaches elections, it remains to be seen how this saga will unfold and how crypto regulations will ultimately be shaped.