US banking lobby last-minute bid to stop Biden vetoing SAB 121 overturn

Just hours prior to United States President Joe Biden vetoing the Staff Accounting Bulletin (SAB) 121 repeal on May 31, the largest lobbying organization for the U.S. banking industry — American Bankers Association (ABA) — penned a letter in an attempt to sway his decision.

“Precluding regulated banking organizations from effectively providing digital asset safeguarding services at scale harms investors, customers, and ultimately the financial system,” the ABA wrote in a May 31 letter to Biden, just before he announced his decision to veto the Congressional resolution aimed at repealing the U.S. Securities and Exchange Commission (SEC) SAB 121 guidelines.

Source: American Bankers Association

Even though both chambers of Congress, the House of Representatives and the Senate, voted in favor of repealing the SAB 121 guidance, Biden opted to use his presidential veto authority, preventing the guidance from being overturned.

The lobbying group explained that the SAB 121 is a big change from how custodial assets are usually treated, and it could make it harder for the industry to keep digital assets safe for customers.

Those in the crypto industry may find the ABA’s pro-crypto statement surprising

“The SAB 121 represents a significant departure from longstanding accounting treatment for custodial assets and threatens the industry’s ability to provide its customers with safe and sound custody of digital assets,” the ABA explained.

“Limiting banks’ ability to offer these services leaves customers with few well-regulated, trusted options for safeguarding their digital asset portfolios and ultimately exposes them to increased risk,” it added.

For some in the crypto industry, the ABA’s pro-crypto statement may be surprising, especially considering that just last year, reports surfaced of the group helping Senator Elizabeth Warren, known for her skepticism towards crypto, in drafting anti-crypto legislation.

In December 2023, Cointelegraph reported on a video that surfaced on X (formerly Twitter), Roger Marshall admitted that he and Elizabeth Warren approached the ABA for assistance in crafting the Digital Asset Anti-Money Laundering Act.

“The first thing that we did is that we went to the American Bankers Association and said ‘help us craft this,” Marshall stated.

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