Regulation
House of Representatives passes cryptocurrency-friendly bill
Top line
The House passed legislation Wednesday night that would give oversight authority over most forms of cryptocurrency to an agency more favorable to the industry, potentially putting President Joe Biden in the difficult position of deciding whether to go against his own SEC chairman and override a veto as former President Donald Trump courts the industry in his 2024 presidential campaign.
The White House said Wednesday it “opposes” the legislation, but did not say the president… [+] Joe Biden would veto the bill.
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Highlights
The House voted 279-136 to pass the Financial Innovation and Technology for the 21st Century Act, with 71 Democrats and 208 Republicans voting in favor of the legislation.
The legislation would place most forms of cryptocurrency, including bitcoin, under the regulatory purview of the Commodity Futures Trading Commission by classifying them as commodities, rather than securities that would fall under the authority of the Securities and Exchange Commission, which has led a crackdown on the industry under Biden.
Lawmakers who supported the bill touted it as a way to clarify regulatory authority for digital assets, with Digital Assets Subcommittee Chairman Rep. French Hill, R-Ark., calling it perhaps “the most substantial piece of digital asset legislation in congressional history,” he said. told Forbes previously, noting that Trump supports the bill.
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Chief Critic
The SEC’s cryptocurrency crackdown, which includes a series of charges against companies and individuals it accuses of violating federal regulations, has become a new line of attack by Trump against Biden as the former president courts cryptocurrency supporters, telling them at a Mar-A-Lago dinner earlier this month that they “better vote” for him, Politico reported. SEC Chairman Gary Gensler opposed the House legislation, argue on Wednesday This would allow cryptocurrency issuers to “self-certify” that they are issuing cryptocurrencies as a commodity rather than a security, giving the SEC a limited 60-day window to review the classification.
Crucial Quote
“The self-certification process contemplated by the bill jeopardizes investor protections not only in the cryptocurrency space; it could also harm the broader $100 trillion financial markets by providing a pathway for those seeking to evade rigorous disclosures, prohibitions preventing the loss and theft of customer funds, SEC enforcement, and investors’ private rights of action in federal courts,” Gensler said Wednesday.
Tangent
Trump’s campaign began to accept cryptocurrency donations on Tuesday, urging his supporters to make the announcement to “build a cryptocurrency army.”
What we don’t know
Will the Democratic-controlled Senate pass the bill? Eight House Democrats who supported the bill urged their Senate colleagues to support it in a memo Tuesday, CoinDesk reportedIn a potential bellwether for the House bill, 11 Senate Democrats, including Majority Leader Chuck Schumer, D-N.Y., voted alongside Republicans earlier this month to roll back SEC regulations on cryptocurrencies, splitting with Biden, who has said he would veto the bill, which also passed the House with bipartisan support.
Key context
Trump embraced cryptocurrency after criticizing the industry during his time as president, Tweeter In 2019, he was “not a fan of Bitcoin and other cryptocurrencies, which are not money and whose value is very volatile and based on nothing.” He has since launched a range of NFT Trading Cards featuring his image and his $7 billion net worth is made up of about $3 million in digital assets, according to a Forbes March EstimateThe Biden administration, meanwhile, has taken a measured approach to cryptocurrencies, acknowledging its explosive growth and the need for the United States to “maintain its technological leadership in this rapidly growing space,” while warning that it “has substantial implications for consumer protection, financial stability, national security, and climate risk,” the White House wrote in a statement. Executive Decree 2022.
Further reading
House of Representatives to Vote on Who Will Regulate Cryptocurrencies (Forbes)
Trump campaign now accepting cryptocurrency donations (Forbes)