Just hours before President Joe Biden vetoed the repeal of Staff Accounting Bulletin (SAB) 121 on May 31, the American Bankers Association (ABA), the largest lobbying organization for the U.S. banking industry, sent a letter to Biden in an attempt to influence his decision.
In the letter, the ABA expressed its concern that preventing regulated banking organizations from offering digital asset safeguarding services at scale would have negative consequences for investors, customers, and the financial system as a whole. This plea came just before Biden announced his decision to veto the Congressional resolution aimed at repealing the U.S. Securities and Exchange Commission (SEC) SAB 121 guidelines.
Despite both the House of Representatives and the Senate voting in favor of repealing the SAB 121 guidance, Biden decided to exercise his presidential veto authority, thus preventing the guidance from being overturned.
The ABA argued that SAB 121 represents a significant departure from how custodial assets are typically handled and could pose challenges for the industry in securely storing digital assets for customers. This statement may come as a surprise to those in the crypto industry, considering that last year there were reports of the ABA assisting Senator Elizabeth Warren, who is known for her skepticism towards crypto, in drafting anti-crypto legislation.
In a video that surfaced in December 2023, Roger Marshall acknowledged that he and Elizabeth Warren sought the ABA’s help in crafting the Digital Asset Anti-Money Laundering Act. This collaboration raises questions about the ABA’s alignment with the crypto industry.
Overall, the ABA emphasized that limiting banks’ ability to offer digital asset safeguarding services leaves customers with few well-regulated options, increasing their exposure to risks. The implications of SAB 121 and its impact on the crypto industry continue to be a topic of discussion, with potential consequences for the upcoming 2024 election.