SEC Bulletin Reversal Blocked by Biden: Implications for Crypto Accounting

I recently stumbled upon  an  interesting article  on Coinatory  discussing   Biden's decision to veto  to block a  bill   to reverse an SEC bulletin,  setting forth accounting standards for companies   holding  cryptocurrency. This move by Biden   greatly impacts  the crypto industry  and  demonstrates the administration's  approach towards crypto regulation.

In an  statement dated May 31,  the President highlighted  that  annulling the SEC's guidance could  weaken  its broader  control over  accounting practices. The bill  sought to revoke the SEC’s cryptocurrency accounting guidelines,  obligating institutions  with crypto assets to record them as liabilities  on their balance sheets. Biden’s administration,  stressing  consumer and investor protection,  declined to endorse  measures that could  endanger their well-being. This stance underscores  the importance of  necessary protections   to capitalize on the  opportunities of crypto-asset innovation.

At the beginning of May , both the House and Senate  passed votes to overturn  the SEC’s staff accounting bulletin, SAB 121. This guidance   requires  financial institutions  with crypto to ensure  customers’ assets are reflected on  their balance sheets, a provision  critics say complicates the involvement of financial institutions  with crypto companies. The House  approved the bill  with a 228-182 vote, with  strong Republican approval and 21 Democrats  supporting it. A week later, the Senate  passed it with a 60-38 vote, with notable support from Democrats , including Senate Majority Leader Chuck Schumer.

However,  annulling a veto  is very challenging ,  needing a two-thirds majority from both houses of Congress. This  significant barrier  ensures that Biden’s veto is likely to stand , much to the  frustration of the cryptocurrency industry.

The immediate backlash  from the crypto community was palpable . The Blockchain Association expressed disappointment , noting  that bipartisan majorities in both Houses recognized the harm  created by SAB 121. Similarly, Cody Carbone, Chief Policy Officer at the Digital Chamber,  denounced the decision  as a setback for innovation .

The veto has sparked concerns  within the crypto community, especially  in light of  speculations that Biden’s campaign has been  communicating with crypto industry leaders to adopt a more pro-crypto stance. Moe Vela, Senior Advisor to Unicoin and former Senior Advisor to Biden,  supported any potential engagement with cryptocurrency thought leaders,  stressing the importance of  incorporating digital currencies  into our financial systems. He  underscored  that crypto is here to stay and that it’s imperative to hear from  both presidential candidates on their plans for the sector’s future.

Sheila Warren, CEO of the Crypto Council,  mentioned  that she was  predictably disheartened by the veto. She  noted the challenge of  walking back public statements , suggesting that  silence could have been a better strategy in some cases.

In conclusion, Biden’s veto of the SEC bulletin reversal is a  evident example of the administration’s cautious approach  towards cryptocurrency regulation. While  Presidential veto  aims to protect  consumers and investors, it also raises significant questions  about the future of crypto accounting standards and the broader regulatory landscape. As the debate continues, it will be  fascinating  to see how these policies  progress and what impact they will have on the burgeoning  crypto industry. For anyone  keeping up with the crypto space, staying  updated  about these developments is  essential , and Coinatory is a  valuable resource  for the latest updates.