The SAB 121 bulletin was passed in June but the president of the United States of America Joe Biden has recently vetoed the new law that seeks to remove it.
Thus, in the letter to the Speaker of the US House of Representatives, President Biden highlighted the importance of the right regulation to preserve consumer and investor protection and encourage businesses in the field of cryptocurrencies. He further said, “There is a need to set adequate guardrails that shield consumers and investors given that the crypto-assets present technological advances and prospects to harness. ”
The SEC bulletin, which was released last year, has been more of an alarm to the crypto community. Some have voiced concern that it could stop banks from efficiently protecting those assets in the digital arena. To summarize, the bulletin mandates that companies reporting on held crypto for customers report it as liabilities to their balance sheets. As with most principles, the SEC justifies SAB 121 as invaluable to investors as it provides information on risks.
In the House and Senate sessions held earlier this month, the decision to repeal the SEC bulletin was passed. to approve it with 228 against 182, with support provided by the majority of Republicans and 21 Democrats. The Senate subsequently passed the bill by a 60-38 margin which the Democrats backed including, Senate Majority Leader, Chuck Schumer.
However, to transverse this barrier, it is important to keep in mind that repealing a presidential veto is a challenging process especially on a bi-partisan basis as it requires the support of both houses of Congress on a two-thirds majority.
This bill has been met with disapproval among the progressive circles, and the President himself had earlier indicated his desire to veto the bill. The White House counterclaimed stating that having limited regulation of cryptocurrencies from the SEC exposes the industry to higher risks of instability and insecurity in the market.
Well, this is not the first time President Biden has canceled legislation supported by both parties. In May, he again vetoed a bill to rescind the joint employer rule even though both the lower chamber of Congress and the upper passed the bill with bipartisan support.
The SEC sees SAB 121 as –a mandatory list of recommendations aimed at increasing the level of transparency to investors. An SEC official said that investors are exposed to risk if firms go bust, and identifying what assets clients have is often a problem in crypto companies. “These disclosures also offer investors valuable line of sight into the quantum of risk undertaken by crypto custodians,” added the spokesperson.
To conclude, President Biden has upheld the setting kept by the SEC in its bulletin, strengthening the administration’s policy on stringent financial regulation in the cryptocurrency sector.
