How Biden Lost Schumer And Pelosi In A Pro-Crypto Revolt

In an election year as heated as 2024, there aren’t many issues bringing Republicans and Democrats together. This week, President Biden learned the hard way that crypto may very well be the exception to the rule. 

It all started with a seemingly innocuous challenge mounted by Republicans to fix a very hated SEC rule against custodying crypto. The SEC’s Staff Accounting Bulletin 121 restricted banks from touching crypto and forced custodians into holding equal amounts of cash against their books. 

When the House introduced a bill that would scrap the rule, President Biden preemptively threatened to veto it. But even that wasn’t enough to stop 21 Democrats from crossing the aisle to join the Republican-led rebuke of the SEC. When the bill made it to the Senate, a dozen Democrats, including Majority Leader Chuck Schumer (D-NY,) broke from President Biden’s threat as well. New Jersey Senator Cory Booker, who also broke from his party, said he “wanted to send a message.”

For crypto advocates, like Digital Chamber founder Perianne Boring, the vote marked a tectonic shift in Washington D.C.

“It's really incredible just to watch how quickly the tides can shift in crypto policy,” she told Coinage in a new interview. “We went and looked back through vote histories over many years, many administrations and we were only able to find two examples in recent history where the Majority Leader and the President broke ranks and voted in opposite. They usually don't do that.”

And then came the second blow to the anti-crypto army. On Wednesday, House Republicans brought FIT21 to the floor – a bill that would establish a new regulatory pathway for cryptocurrencies to trade legally in the U.S. mostly under the watch of the more crypto-friendly Commodity Futures Trading Commission. While President Biden stopped short of threatening another veto, he joined other Democrats like Rep. Maxine Waters (D-CA) in opposing the legislation. Once again, even that proved futile. The bill passed the House with a shocking 71 Democrats abandoning the anti-crypto guidance, including former Speaker Nancy Pelosi.

“The digital asset industry needs clearer rules of the road and the federal government needs stronger enforcement authority in order to ensure the responsible development of this emerging technology,” she said in a statement.

Suddenly, President Biden appeared to be on the wrong side of the issue — and as of Friday, had not followed through on his veto threat to block the repeal of SEC’s Staff Accounting Bulletin 121. He has until May 28 to make a decision.

“Given that the Senate Majority Leader Chuck Schumer has voted in favor of the bill, I would assume that the White House is revisiting this intent to veto,” Boring said.

Given the fact that President Trump began accepting donations in crypto this week, and the fact that SEC approved ethereum ETFs this week, perhaps President Biden is revisiting more than just that.