President Biden to veto regulated crypto custody legislation

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In a recent statement from the Executive Office of the United States President Joe Biden, the President’s Administration announced that he would veto legislation enabling highly regulated financial firms to act as custodians for cryptocurrencies.

Specifically, the Administration of the incumbent US President voiced its strong opposition to the passage of House Joint Resolution (H.J. Res.) 109, adding that President Biden would veto it if he were to see it, according to the document from May 8.

Biden’s opposition to the legislation. Source: The White House

Opposing arguments

Indeed, listing the reasons for the President’s opposition to this legislation, the statement said that it would interfere with the work of the US Securities and Exchange Commission (SEC) and invalidate the regulations that the Administration deemed more valuable:

“[It] would disrupt the [SEC’s] work to protect investors in crypto-asset markets and to safeguard the broader financial system [and] would invalidate SEC Staff Accounting Bulletin 121 (SAB 121), which reflects considered SEC staff views regarding the accounting obligations of certain firms that safeguard crypto-assets.”

On top of that, the Administration said that the SAB 121 was a “response to demonstrated technological, legal, and regulatory risks that have caused substantial losses to consumers,” as well as adding that such legislation if adopted, could threaten financial stability:

“By virtue of invoking the Congressional Review Act, it could also inappropriately constrain the SEC’s ability to ensure appropriate guardrails and address future issues related to crypto-assets, including financial stability. Limiting the SEC’s ability to maintain a comprehensive and effective financial regulatory framework for crypto-assets would introduce substantial financial instability and market uncertainty.”

Rival’s crypto-friendly stance

Meanwhile, such opposition to crypto-friendly laws has earned the current US President (more) criticism, including from his rival in the presidential race and former US President, Donald Trump, who recently mocked Biden for, as he believes, not understanding the crypto industry.

At the same time, Trump contrasted Joe Biden’s crypto views to his own, according to which he was “fine with it,” whereas the Democratic Party and the SEC was “very much against it,”  as he told his supporters at an exclusive dinner at his Mar-a-Lago resort in Palm Beach, Florida.

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