Regulation
House Democrats choose ‘no lash’ stance on FIT21 crypto bill
Recently, a report revealed that Democratic leaders in the House of Representatives said they would not oppose the Financial Innovation and Technology for the 21st Century Act (FIT21).
This position is considered important given the ongoing debate over the regulation of cryptocurrencies and digital products.
Background and concerns raised by House Democrats
Politico reporter Eleanor Mueller recently sharing an email from House Democrats regarding the FIT21 Act bill. The email provides a brief history of the bill and the House Democrat’s overall view.
It highlights concerns regarding the language of the bill which addresses digital assets sold as “investment contracts” as non-securities, which allows them to be traded on the secondary market. The email notes that this language undermines decades of legal precedent, creating uncertainty in traditional securities markets.
“The bill also provides a safe harbor in which entities can file an ‘intent to register’ if they meet certain requirements, effectively shielding them from SEC rules and regulations until the SEC and the CFTC finalize their rules, weakening investor protections and opening the door. to fraud and market manipulation,” the email bed.
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While the email does not urge Democrats to vote “no,” it does indicate that Ranking Member Maxine Waters strongly opposes the bill. Ranking Members Waters and David Scott sent a letter to their colleagues voting “no” on the bill.
They fear the bill could lead to massive deregulation of crypto and some traditional securities. In addition, they believe that this deregulation would seriously harm American financial markets by remove key investor protections and consumers.
“The entities that will benefit from this bill are not ordinary investors trying to create wealth, but rather crypto companies that have chosen not to register with the SEC or comply with laws on securities. They have already made billions of dollars by illegally issuing or facilitating the buying and selling of crypto securities. Many of these companies, like Coinbase, are being sued by the SEC for violating state securities laws. Now, rather than complying with the law, these companies are lobbying Congress to legitimize their illegal activities,” Ranking Members Waters and Scott said. wrote in their joint letter.
Conversely, lawmakers on the House Republican Financial Services Committee announcement that the House will vote on the FIT21 legislation this week.
Legislative support and progress for FIT21
FIT21 was introduced in July 2023 by Chairman Glenn “GT” Thompson and co-sponsored by several prominent Republicans. It aims to establish clear federal requirements for digital asset markets and balance innovation with strong consumer protections.
Several industry advocates and House members support the bill. Both the Blockchain Association and the Crypto Council for Innovation have called on parliamentary leadership to support FIT21. The Blockchain Association recently sent a letter to House Speaker Mike Johnson and Rep. Hakeem Jeffries, pleading for a floor vote.
“The policy issues facing our industry are complex – and passage of this bill in the House will allow continued discussions and debates in the Senate. Therefore, our members urge the House of Representatives to vote “yes” on HR 4763,” the Blockchain Association. explain.
Learn more: How does regulation impact crypto marketing? A complete guide
Besides FIT21, other crypto-focused legislation is also moving forward. BeInCrypto recently reported that the The US Senate voted in favor of HJ Res 109, a resolution to rescind the SEC’s controversial Staff Accounting Bulletin No. 121 (SAB 121). However, it did not get enough votes to be veto-proof. President Joe Biden vowed to veto the resolutionarguing that rescinding SAB 121 would weaken the SEC’s ability to protect investors and the financial system from crypto-related risks.
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