Biden Administration Supports SEC’s Actions Against Crypto Firms

The administration of United States President Joe Biden has taken a firm stance against a joint resolution affecting crypto policy at the Securities and Exchange Commission (SEC), indicating plans for a potential veto if the resolution reaches the President’s desk.

The White House issued a statement on May 8 expressing strong opposition to the House of Representatives members seeking to pass H.J.Res. 109, a joint resolution aimed at overturning the SEC’s Staff Accounting Bulletin (SAB) No. 121. This bulletin mandates banks to maintain customers’ digital assets on their balance sheets with capital reserves.

Biden Administration to Veto Joint Resolution

The Biden administration highlighted the importance of SAB 121 in addressing technological, legal, and regulatory risks that pose significant losses to consumers. The invocation of the Congressional Review Act through H.J.Res. 109 could potentially limit the SEC’s ability to regulate crypto-assets effectively, leading to financial instability and market uncertainty.

The resolution has sparked debates among Democratic and Republican leaders on the House Financial Services Committee. Representative Patrick Henry advocated for the resolution, emphasizing the need for banks to ensure the safekeeping of Americans’ digital assets.

Biden Administration’s Opposition to the Resolution

However, Representative Maxine Waters opposed the resolution, emphasizing the transparency that SAB 121 brings to the digital asset space and its role in preventing fraud and mishandling.

Following a voice vote in favor of H.J.Res. 109, Representative McHenry called for a count of the yeas and nays, leading to a postponement of proceedings on the resolution. If the resolution progresses further and reaches President Biden’s desk, his administration has signaled its intention to veto it.

SEC and Crypto Industry 

The SEC has been criticized for its strict stance on cryptocurrencies, and members of the digital asset sector have asked the Biden administration for clear regulatory policies multiple times in the past. However, the regulator remains a firm believer in the fact that all digital assets and related offerings are securities, launching lawsuits against crypto firms. 

Recently, the SEC issued a Wells Notice to Robinhood, claiming that the platform sold unregistered securities via its crypto arm. The company claims that it was disappointed in the regulator’s actions, adding that it had been involved in discussions with the SEC staff over the registration of its operations.

On the other hand, SEC Chair Gary Gensler expressed frustration with the overwhelming focus on cryptocurrency during media interviews, stating that the crypto market is a small fraction of the overall financial landscape.