U.S. President Joe Biden has vetoed a bill that sought to overturn the Securities and Exchange Commission's (SEC) staff accounting bulletin, SAB 121. This controversial bulletin establishes accounting standards for firms that custody cryptocurrency, and its implementation has been a topic of debate in the crypto industry.

In a letter addressed to the U.S. House of Representatives, President Biden emphasized the importance of maintaining "appropriate guardrails" to protect consumers and investors, stating that these measures are "necessary to harness the potential benefits and opportunities of crypto-asset innovation." The President's veto comes after both the House and Senate voted in favor of repealing SAB 121, with some Democrats joining Republicans in supporting the measure.

The SEC's staff accounting bulletin has been a subject of controversy over the past year, with some in the crypto industry expressing concerns that it could prevent banks from safeguarding digital assets. The bulletin requires firms that custody crypto to record customer crypto holdings as liabilities on their balance sheets, which has raised concerns about the potential impact on the crypto market.

However, the SEC has maintained that SAB 121 is "non-binding staff guidance" that strengthens disclosures to investors, providing them with important information about the level of risk taken by crypto custodians. The SEC has also pointed out that the lack of such disclosures has led to investors losing money in the past, and that the bulletin aims to prevent such incidents from occurring in the future.

President Biden's veto is in line with his administration's stance on maintaining a comprehensive and effective financial regulatory framework for crypto-assets. The White House has previously stated that limiting the SEC's ability to regulate the crypto market could introduce substantial financial instability and market uncertainty.

The President's veto is not unprecedented, as he has previously vetoed measures that passed with bipartisan votes in both the Senate and House. For example, in May, he vetoed a measure to overturn a joint employer rule that had passed with bipartisan support.

The crypto industry has been closely watching the developments surrounding SAB 121, and the President's veto is likely to have significant implications for the market. While some may view the veto as a setback, others may see it as a necessary step to ensure consumer protection and financial stability in the rapidly evolving crypto landscape.