The regulation process in the crypto market continues to be a topic of discussion. Just hours before U.S. President Joe Biden vetoed the repeal of Staff Accounting Bulletin (SAB) 121 on May 31, the American Bankers Association (ABA), the largest lobbying organization in the U.S. banking sector, wrote a letter to influence the decision.
Notable Move in the U.S.
In a letter sent to Biden on May 31, the ABA shared the following statements just before Congress announced its decision to veto:
“Preventing regulated banking institutions from effectively offering crypto asset custody services on a large scale harms investors, customers, and ultimately the financial system.”
The U.S. Securities and Exchange Commission (SEC) is repealing the SAB 121 guidelines. Although both the House of Representatives and the Senate voted to repeal the SAB 121 guidelines, Biden chose to use his presidential veto power to prevent the repeal.
Details on the Process
The lobbying group stated that SAB 121 represents a significant change from the general handling of custodial assets and could make it difficult for the sector to keep crypto assets safe for customers. They shared the following statements:
“SAB 121 represents a significant deviation from long-standing accounting practices for custodial assets and threatens the sector’s ability to ensure the safe and sound custody of digital assets for its customers.”
“Limiting banks’ ability to offer these services leaves customers with few well-regulated, reliable options to protect their crypto asset portfolios, ultimately exposing them to increased risk.”
For some in the crypto industry, the ABA’s pro-crypto statement might be surprising, especially considering reports from last year that the group helped Senator Elizabeth Warren, known for her skepticism towards crypto, draft anti-crypto legislation.
In December 2023, a video surfaced on X where Roger Marshall admitted that he and Elizabeth Warren sought help from the ABA in drafting the Crypto Asset Anti-Money Laundering Act, stating:
“The first thing we did was go to the American Bankers Association and ask for help.”
