US President Joe Biden has vetoed congressional resolution H.J. Res.109, which aimed to repeal the US Securities and Exchange Commission (SEC) Staff Accounting Bulletin (SAB) No.121. This controversial measure, widely seen as anti-crypto, had sparked significant debate within the industry. Biden's veto comes amidst speculation that the administration is trying to curry favor with crypto voters ahead of the upcoming US general elections.

On March 31, 2022, the SEC introduced SAB 121, requiring financial institutions that custody cryptocurrencies for clients to consolidate these assets on their balance sheets. This effectively prevented firms from safeguarding such digital assets independently.

SAB 121 faced heavy criticism for its anti-crypto stance and its circumvention of the typical rulemaking process, which usually includes input from relevant stakeholders.

In early May, the US Congress voted to repeal SAB 121, with the House passing the resolution 228-182 and the Senate approving it 60-38. However, Biden has now vetoed this resolution, citing several reasons.

Firstly, Biden argued that repealing the guidance would "inappropriately" undermine the SEC’s ability to set proper regulatory systems and address future issues. He also expressed concerns that the repeal could expose US investors to various risks.

"My Administration will not support measures that jeopardize the well-being of consumers and investors," Biden stated. "Appropriate guardrails that protect consumers and investors are necessary to harness the potential benefits and opportunities of crypto-asset innovation."

The President also highlighted the need for clear federal rules and regulations for the crypto space, emphasizing the administration's willingness to collaborate with Congress on developing a comprehensive regulatory framework. "My Administration is eager to work with Congress to ensure a comprehensive and balanced regulatory framework for digital assets, building on existing authorities, which will promote the responsible development of digital assets and payment innovation and help reinforce United States leadership in the global financial system," he said.

Biden Government Back to 'Default' Crypto Policy?

Recent actions, such as the sudden approval of the Ethereum spot ETF, had led to speculation that the administration might be softening its stance on digital assets. However, Biden's recent veto likely casts doubt on such beliefs.

US crypto users, numbering around 46 million, are expected to make their voices heard in the upcoming elections to protect their interests amid the current regulatory climate. While it remains to be seen whether the Biden administration will make further efforts to win over these voters, former President Donald Trump, a direct opponent of Biden and a former Bitcoin critic, has begun advocating for cryptocurrency development in the US.