US President Joe Biden vetoed a resolution that would have overturned the Securities and Exchange Commission's (SEC) guidance on accounting for cryptocurrencies (SAB 121).

These guidelines require banks to display cryptocurrency on their balance sheets, making it difficult to provide crypto-asset custody services.

The announcement states that SAB 121 reflects the SEC staff's considered view of the accounting obligations of certain firms that are standing up to cryptocurrency protection. This resolution would unnecessarily limit the SEC's ability to establish needed protections and address concerns in the future.

In the letter, the President noted that his administration would not support measures that jeopardize the welfare of investors and consumers.

Groups that lobby for the interests of large banks sent a letter to the president's group asking him not to veto the resolution.

The groups said that SAB 121 effectively prohibits all regulated banking organizations from offering large-scale custody of cryptocurrencies. Institutions that are forced to register held crypto assets on their balance sheets are subject to even higher liquidity, capital, and other prudential requirements compared to non-banks.

On May 30, Congressmen Tom Emmer, Patrick McHenry, Senator Cynthia Lummis, and others send a letter to the President with the same request — not to veto the bill.

On May 16, the United States Senate passed a joint resolution nullifying Personnel Records Bulletin 121. Before that, on May 8, the White House administration announced that the president was ready to veto the bill.

Biden's advisors emphasized that if the directive is canceled, the SEC will not be able to ensure the security of the financial system and protect investors in the digital asset market.

Staff Accounting Bulletin 121 was released in April 2022. The document contains recommendations on the storage of digital currencies. Among other things, it stipulates that banks are obliged to record assets on their balance sheets. This limits the ability of organizations to provide custody services on a large scale.

In February of this year, industry organizations appealed to the SEC to ease SAB 121. The Commissioner of the SEC called the document and all of the guidance to it a "noxious weed."

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