President Biden vetoes Congress repeal of bill preventing financial institutions from custodying crypto assets

• US President Joe Biden signed a veto decision to overturn the reversal of SAB121, which Congress passed. 
• The veto stirs doubts among crypto community members amid speculations that the President seeks to turn pro-crypto. 
• Biden seeks to work with Congress on legislation addressing the digital asset markets.

US President Joe Biden signed a veto on Friday to overturn Congress's joint decision to repeal controversial SAB121 guidelines from the Securities & Exchange Commission (SEC).

Biden vetoes bipartisan support for overturning SAB121

President Joe Biden signed a veto to overrule the repeal of the Staff Accounting Bulletin 121 (SAB121) issued by the SEC in 2022 despite bipartisan support from both sides of Congress.

SAB121 is an accounting guideline originally issued by the SEC in 2022. It requires a firm that custody crypto assets for clients to record them as liabilities on its own balance sheet. Due to criticisms from crypto industry leaders and several lawmakers, Congress moved to repeal SAB121.

Also read: Senate votes to overturn SEC rule preventing highly regulated financial firms from custodying digital assets

The House of Reps voted first, passing the bill to overturn SAB121 with 228 members supporting the move against opposition from 182 members. One week later, the Senate had a 60-38 vote, which sealed the overturn but did not make it veto-proof.

President Joe Biden's action against the overturn may not be as much of a surprise, even though some crypto community members are in shock. Biden had hinted at a veto in a statement earlier, describing the dangers it may constitute.

In the statement for the veto, Biden added that his "administration will not support any measures that jeopardize the well-being of consumers and investors."

Furthermore, Biden revealed eager plans to work with Congress to provide "clear-cut" regulatory frameworks to guide digital assets.

Read more: US House of Reps passes bill aiming to regulate cryptocurrencies

The veto has raised concerns among the crypto community, especially as it contradicts speculations that Biden's campaign has been reaching out to crypto industry players in a bid to become more pro-crypto.

"Disappointed but not surprised by the veto of SAB121 CRA- as I often say, silence is golden, because some positions once publicly stated wind up being tough to walk back," said Sheila Warren, CEO of Crypto Council.

US House of Rep members Mike Flood also posted on X:

"While President Biden's veto is disappointing, it isn't the last word on SAB 121. Digital assets and cryptocurrency are here to stay and are a critical part of America's financial future."