President Biden vetoes a bill overturning SAB 121, a controversial SEC bulletin that establishes accounting standards for companies that custody crypto
The veto preserved an SEC custody-accounting framework at a moment when crypto policy was being contested through both agency action and legislation. That legislative friction had already surfaced in the failed Senate crypto amendment effort.
The episode matters because custody rules determine whether regulated financial institutions can offer crypto safekeeping on workable terms. The policy’s later SEC revocation shows how exposed such guidance was to shifts in federal priorities.
First-order effects
SAB 121 remained in force, so companies—particularly banks—custodying crypto continued to account for those assets under the bulletin’s requirements.
The SEC retained its existing framework for crypto custody rather than having Congress nullify it.
Second-order effects
Banks and other regulated custodians faced continued uncertainty over the economics of expanding crypto-custody offerings, while crypto firms had less immediate relief from the rule.
The veto kept crypto custody at the center of the agency-versus-Congress policy dispute, encouraging industry participants to pursue both regulatory and legislative routes.
Third-order effects
The episode points to crypto market structure being shaped as much by accounting and custody treatment as by rules aimed directly at trading or token issuance.
If policy reversals continue across administrations, firms may treat federal crypto guidance as politically contingent and favor business models that can withstand changing compliance assumptions.
The trend: Crypto regulation is increasingly being decided through the interaction of agency guidance, congressional intervention, and administration-level policy reversals.
I will not stand idly by as this admin attempts to skirt the law, and I will continue to fight to promote financial innovation and key protections for crypto assets this admin seems hellbent on stifling. My statement on the president's decision to veto my SAB 121 CRA⬇️ [image]
1/ Today, despite bipartisan support, Pres Biden vetoed the repeal of SAB 121, the SEC's punitive, anti-crypto accounting guidelines. We're disappointed that the admin chose to overrule bipartisan majorities in both Houses of Congress who recognized the harm created by SAB 121. […
A dumb stance by the admin on SAB, because their concern isn't even with the crypto portion itself, it's the implementation. But this remains the important line; Biden's administration now actively *wants* reg frameworks for digital assets and realizes it's important to US [image…
Biden just Vetoed the only pro-crypto bill to ever come across his desk. This was a layup. SAB 121 is an anti-crypto rule put in place by Gensler's SEC to stop banks from holding crypto. Crypto hates it. The banks hate it. All he had to do was not veto the repeal. This will [imag…
Biden vetoes the resolution to nullify SAB 121. Process? Who cares. Consumer protection? No thanks. Appeasing Gensler's crypto vendetta? Sure thing. This is a slap in the face to innovation and financial freedom. #Crypto #Fail [image]
We're incredibly disappointed, but not surprised, that the President has vetoed the repeal of SAB121. 60 Senators on both sides of the aisle saw how this could protect consumers in the digital asset market and we were hopeful that the President would recognize that. It's more
🚨 BREAKING: Biden vetoes Crypto bill SAB 121 which now crates much more onerous work for Crypto companies and strengthens SEC overreach. Biden continues to do his best to ensure a Trump presidency. [image]
It's extremely disappointing @POTUS vetoed the SAB 121 CRA. This ignores multiple bipartisan votes, which sent the Administration a clear message its approach to digital asset policy is misguided. Congress will continue fighting for regulatory clarity for digital assets.