My Crypto Lawyer
After not using this same power last week, Joe Biden surprised the cryptocurrency market by vetoing a crypto-related bill. This step-back decision happened amid Donald Trump’s conviction in an unprecedented election where cryptocurrencies could play an important role.
On May 31, nearing the end of the day and week, Joe Biden vetoed congressional disapproval of the U.S. Securities and Exchange Commission’s (SEC) accounting bulletin on crypto assets—the SAB 121.
“By virtue of invoking the Congressional Review Act, this Republican-led resolution would inappropriately constrain the SEC’s ability to set forth appropriate guardrails and address future issues.”
Notably, Biden’s administration previously declared it would not use the veto on another crypto-related bill as Donald Trump gained popularity. His first decision was related to the FIT21 Act, approved on May 22 with 279 to 136 votes.
Donald Trump’s conviction and Joe Biden’s crypto step back
Donald Trump was charged and convicted of 34 counts of falsification of business records in the first degree. This criminal conviction has shaken the presidential election and opened space for Biden to step in favor of the SEC.
Interestingly, Trump started gaining popularity among cryptocurrency enthusiasts with a crypto-friendly approach in a currently hostile regulatory environment. On the other hand, Biden gained a few points by declaring he would not veto the FIT 21 Act.
However, the surprising turn of events has clarified Joe Biden’s position about cryptocurrencies, which may affect this year’s elections. Known investors have commented on the decision.
Wall Street lobbying groups urged Joe Biden not to veto
Not only the cryptocurrency community opposed this veto but even Wall Street representatives have previously urged Biden to reconsider his stance. Surprisingly, lobbying groups in the finance and stock markets sent a letter to the President asking him to “reverse course” a few hours before the official announcement.
This lobbying pressure happened as Joe Biden’s administration hinted they would not allow Congress to challenge the SEC authority. Therefore, this is what the letter stated:
“SAB 121 effectively precludes regulated banking organizations from offering digital asset custody at scale since it treats the assets as if they are owned rather than simply custodied by a banking organization. Institutions that are forced to record custodied digital assets on balance sheet are subjected to higher capital, liquidity, and other prudential requirements, unlike their non-bank competitors.”
Nevertheless, some cryptocurrency developers argued that this was a positive outcome for the original ethos of crypto. According to Mike in Space, creator of Bitcoin Stamps, this veto has long-term positive effects on the self-custody industry.
Now, the United States awaits further developments in the following weeks, which may define the direction of 2024’s presidential elections. Crypto investors speculate whether the country will become more or less friendly to innovation and place their bets accordingly.
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