Washington, D.C. – President Joe Biden on Friday blocked a Congressional resolution aimed at overturning the U.S. Securities and Exchange Commission’s controversial crypto accounting guidance, stating that the measure would “inappropriately constrain” the agency’s ability to address future issues.
In his statement, Biden asserted that using the Congressional Review Act (CRA) to roll back the SEC’s Staff Accounting Bulletin 121 (SAB 121) “risks undercutting the SEC’s broader authorities regarding accounting practices.” The CRA allows Congress to overturn final rules issued by federal agencies but also prevents agencies from reissuing a similar rule without Congressional approval.
“By virtue of invoking the Congressional Review Act, this Republican-led resolution would inappropriately constrain the SEC’s ability to set forth appropriate guardrails and address future issues,” Biden stated.
SAB 121 directs banks and other custodians to account for digital assets held in custody on their balance sheets. Some lawmakers have argued that this requirement could harm consumers by discouraging well-regulated entities from safeguarding crypto assets due to heightened capital requirements and confusing how customer assets are handled during bankruptcy proceedings.
