Biden Vetoes SAB-121 Disapproval; Strikes Blow for Compliance
Washington, D.C.—In an unexpected twist that left both crypto enthusiasts and bipartisan legislators scratching their heads, President Joseph R. Biden Jr. has vetoed H.J. Res. 109 on May 31, 2024, effectively maintaining the contentious Securities and Exchange Commission (SEC) Staff Accounting Bulletin 121 (SAB-121) in place. With this act, Biden has struck a resounding blow for compliance, proving once again that when it comes to bureaucracy, there’s always room for one more rule.
For those who have not been diligently following the Kafkaesque saga of American financial regulation, SAB-121 is a piece of regulatory craftsmanship that dictates how firms safeguarding crypto-assets should account for them. The SEC, in its infinite wisdom, decided that firms should be more meticulous, detailed, and, most importantly, slower in their accounting processes. Because nothing says "financial stability" like making sure your books are as thick and inscrutable as a Tolstoy novel.
On May 8, the White House issued a statement that could only be described as a symphony of bureaucratic jargon. The Administration, in its infinite compassion for the little guy, declared that opposing H.J. Res. 109 was essential to protect the fragile, trembling investors in the crypto market from themselves. The statement read: "H.J. Res. 109 would invalidate SEC Staff Accounting Bulletin 121 (SAB-121), which reflects considered SEC staff views regarding the accounting obligations of certain firms that safeguard crypto-assets." In layman's terms, it seems the Administration believes that without SAB-121, the SEC might be as helpless as a lifeguard at an Olympic swimming competition.
The statement continued, highlighting the "demonstrated technological, legal, and regulatory risks that have caused substantial losses to consumers." Here we see the government’s undying commitment to protect the public from the wild, wild west of the crypto market—a place where every investor apparently rides a horse and carries a six-shooter, and where the SEC is the sheriff in town, trying to bring order to this digital frontier.
On May 31, President Biden took the bold step of vetoing the resolution, and in doing so, struck a mighty blow for compliance and the bureaucratic way of life. With a stroke of his pen, he ensured that the SEC retains its formidable arsenal of regulations to tackle the anarchic crypto landscape. This move came despite strong bipartisan support for the elimination of SAB-121, proving once again that in Washington, common ground is just the place you dig to bury the hopes of the many.
In his veto statement, Biden emphasized the importance of maintaining SEC authority. “SAB 121 reflects considered technical SEC staff views regarding the accounting obligations of certain firms that safeguard crypto-assets. 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,” he stated. One might wonder why such a controversial piece of legislation received so much bipartisan support in the first place. It appears that both Republicans and Democrats can agree on at least one thing: nobody likes extra paperwork. As Senator Gridlock Jones (R-Anywhere) put it, “This veto is a testament to the Administration’s commitment to keeping American businesses mired in red tape, ensuring that our economic wheels turn as slowly as possible.” Senator Lefty O’Rights (D-Somewhere) added, “We were hoping to cut some of this bureaucratic fat, but it seems the President believes in a hearty, regulation-rich diet for the SEC.”
Crypto enthusiasts, who had been hoping for a reprieve from the SEC’s suffocating embrace, were left despondent. “This is a huge setback for innovation,” said Byte Chain, a leading voice in the crypto community. “We were hoping to foster a new era of transparency and efficiency, but it seems we’ll have to settle for more of the same old bureaucratic quagmire.”
Ironically, this veto arrives at a time when the Biden campaign is attempting to mend fences with the crypto community. In a surprising turn, Biden’s campaign has reached out to crypto experts for input on shaping future crypto policies. This outreach is seen as a significant shift in stance, especially after former President Donald Trump announced that his re-election campaign would accept crypto donations, signaling a more crypto-friendly position. Cathie Wood, the founder and CEO of ARK Invest, highlighted the political motivations behind the recent approval of Ethereum ETFs, attributing it to maneuvering in the Biden administration.
The President’s decision underscores a fundamental truth about American governance: when faced with the choice between simplifying and complicating, the latter will always win. After all, if it ain’t broke, regulate it until it is.
As the dust settles, one can’t help but marvel at the Administration’s ability to turn a straightforward issue into a labyrinthine conundrum. The veto of H.J. Res. 109 is not just a victory for compliance; it’s a triumph for the art of keeping things as convoluted as humanly possible. For in this great nation, where the government’s love for paperwork knows no bounds, the pen is truly mightier than the sword.
In the end, President Biden’s veto sends a clear message: in the battle between progress and paperwork, paperwork wins every time. As investors and businesses brace for the continued onslaught of regulatory decrees, one thing is certain—compliance is king, and bureaucracy reigns supreme.
So, here’s to SAB-121, the little bulletin that could. May it continue to clog the gears of progress and ensure that our financial system remains as impenetrable as ever. After all, if the SEC can’t protect us from the dangers of innovation, who will?
