US President Joe Biden has now officially vetoed the repeal of SEC Directive SAB 121. The White House announced this in a press release. Both the House of Representatives and the Senate had previously voted to abolish the directive. Biden had announced then that he would take action against it.

SAB 121 is considered controversial in the cryptocurrency industry because the SEC requires banks and other financial institutions to recognize cryptocurrencies held in custody for customers as liabilities on their own balance sheets. A cost-intensive process that particularly disadvantages smaller companies when working with crypto service providers, critics say.

Biden and the White House see it differently. The letter states, "The Republican-led resolution would improperly limit the SEC's ability to establish appropriate guardrails and address future problems."

The repeal would undermine the SEC's broad authority over accounting practices, the president continued. "My administration will not support any action that jeopardizes the well-being of consumers and investors."

Biden therefore vetoed the bill, but at the same time indicated his willingness to work with Congress.

Further procedure in the US now provides for the proposal to be referred back to the original chamber, the House of Representatives, and debated again. However, House members can also override the president's veto by a two-thirds majority.

After the House of Representatives, the proposal then goes to the Senate. If a two-thirds majority is obtained here as well, the amendment goes into effect (even without presidential approval).

However, this scenario is unlikely to materialize. The Republicans have a majority in the House of Representatives. But in the Senate, resistance from the Democratic camp is likely to be too great to achieve a two-thirds majority.