Biden Vetoes Bill Overturning SEC Crypto Accounting Rule

US President Joe Biden on Friday vetoed a bill that would nullify crypto accounting guidance by the Securities and Exchange Commission, dealing a blow to the crypto industry.

The guidance—known as SEC Staff Accounting Bulletin No. 121—directs public companies holding crypto for customers to keep the assets on their balance sheets. Critics say the guidance is especially burdensome for banks because it would require them to set aside assets worth a similar amount to protect against losses in order to comply with separate capital requirements. That has discouraged banks from entering the crypto custody business.

Earlier this month, Congress passed the bill overturning the SEC guidance. In a statement, Biden said that the reversal of the guidance risks “undercutting the SEC’s broader authorities regarding accounting practices.” The administration is “eager to work with the Congress” to ensure a regulatory framework for digital assets, he said.