Regulation
New law will limit SEC control over crypto, if approved
The House Rules Committee announced consideration of the Financial Innovation and Technology for the 21st Century (FIT21) Act, paving the way for a crucial vote later this month.
The FIT21 Act aims to bring much-needed regulatory clarity to cryptocurrencies, an industry plagued by uncertainty that has hampered innovation and consumer protection.
SEC jurisdiction over crypto removed by new law
The FIT21 law represented a collaborative effort of the House Financial Services and Agriculture Committees, reflecting years of bipartisan work.
“For too long, the U.S. digital asset ecosystem has been plagued by regulatory uncertainty that has stifled innovation and left consumers unprotected,” said Financial Services Committee Chairman Patrick McHenry (R-NC). of the House of Representatives.
This comprehensive legislation will delineate the roles of Commodity Futures contracts Trading Commission (CFTC) and the Securities Exchange Commission (SEC). The CFTC will gain new jurisdiction over crypto products, while the SEC authority will be clarified for cryptos offered in the form of investment contracts. This bifurcation aims to strengthen consumer protection and market surveillance.
House Agriculture Committee Chairman Glenn “GT” Thompson (R-PA) highlighted the dual benefits of consumer safety and market innovation.
“FIT21 is a regulatory foundation to protect consumers and investors, but also propels American leadership in digital finance,” Thompson said.
The bill imposes strict disclosure requirements for crypto developers and customer-serving institutions. These entities must segregate client funds from their own and provide detailed information on operations and ownership, thereby improving transparency and reducing conflicts of interest.
Learn more: Crypto regulation: what are the advantages and disadvantages?
The FIT21 law also introduces a secondary market trading process for crypto products initially offered as investment contracts. This measure supports crypto projects raising funds while ensuring regulatory compliance.
Congressman Dusty Johnson (R-SD) emphasized the urgency of this legislation, warning that without regulatory clarity, the United States risks losing its advantage against countries with established digital asset regulations.
“It is time to bring clarity and regulatory authority to the Commodity Futures Trading Commission and the Securities Exchange Commission to ensure customer protection and market oversight,” Johnson said.
As the FIT21 Act progresses, it promises to solidify America’s role as a leader in global digital finance, ensuring both innovation and protection in the cryptocurrency market.
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