Regulation
House of Representatives to vote on FIT21 Act, aimed at clarifying US crypto regulations
The U.S. House of Representatives is expected to vote on the Financial Innovation and Technology for the 21st Century Act (HR 4763), commonly known as FIT21, by the end of the month.
According to a letter from a16z, this bill aims to clarify the regulation of cryptocurrencies by defining the responsibilities of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), creating a clear regulatory framework for the assets digital.
Despite some industry concerns about strict decentralization requirements and potential jurisdictional overlaps, the Invoice is seen as a vital step towards clearer regulation.
This bipartisan legislation received support from both the House Committee on Financial Services and the House Committee on Agriculture.
FIT21 aims to clarify which digital assets fall under SEC regulation as securities and which fall under CFTC regulation as commodities. The bill seeks to classify an asset as a security if its underlying blockchain has not achieved sufficient decentralization.
Additionally, the bill proposes consumer protection measures for crypto exchanges, such as segregation of customer funds, lock-up periods for token insiders, and disclosure requirements.
Amid continued regulatory uncertainty in the United States, the SEC has assumed the position of primary regulator of the crypto industry, leading multiple enforcement actions against crypto-related businesses. Some of these actions were demonstrated in its lawsuits against the exchanges Coinbase and Binance.
Following the lawsuit on Coinbase, the exchange disputed that the SEC’s classification of cryptocurrencies listed on its platform as securities constitutes overreach, as the company makes its final effort to dismiss the lawsuit.
Also the CEO of Binance declared that its lawsuit against the SEC led banking institutions to withdraw their support for the stock market. He said this had led to significant operational disruption.
Ripple has also continued to fight the SEC, with its lawsuits now in the appeals phase. The broader crypto community has deplored these coercive measures, pleading for clearer rules. On May 10, the House Financial Services Committee announcement its draft revision of the FIT21 law.
House Financial Services Committee Chairman Patrick McHenry highlighted the importance of the FIT21 Act in resolving lingering regulatory ambiguities.
“For too long, the U.S. digital asset ecosystem has been plagued by regulatory uncertainty that has stifled innovation and left consumers unprotected.”
» said US Representative Patrick McHenry.
Previously, crypto.news reported that CFTC Chairman Rostin Behnam had urged Congress to provide a clearer basis for crypto regulation, emphasizing the need to close regulatory gaps.