Regulation
Three ways McHenry’s crypto markets bill will change the industry – DL News
- The House is expected to vote on the FIT Act later this week.
- This would be the first time a standalone crypto bill has passed.
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Republican Congressman Patrick McHenry’s landmark crypto bill FIT21 lawheads to the House for a vote.
This is a big deal because it’s the first time a standalone crypto bill has been heard by the full House.
According to McHenry, the FIT21 law is ready to bring much-needed clarity to the crypto industry.
However, not everyone is convinced. Democratic Representative Maxine Waters called it is a “wish list of big cryptocurrencies and does not deserve any of our support.”
With the Securities and Exchange Commission on a fly-swatting mission – aiming to ConsenSys, CoinbaseAnd that of Robinhood crypto companies for alleged securities violations – McHenry’s bill couldn’t have come at a better time.
Three takeaways for FIT
Here are the three key points to remember.
First, the law will clarify who should regulate crypto and how. If a network can prove that it is sufficiently decentralized, for example, it will fall under the Commodity Futures Trading Commission.
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Otherwise, it would be given to SEC Chairman Gensler. According to FIT21, this would not be a bad thing as crypto companies would finally be able to launch and trade coins legally.
This brings us to the second key takeaway.
If passed, FIT21 would create a clear registration process for crypto companies to work with the SEC – something the industry says is currently too onerous.
Dan Gallagher, Robinhood’s head of legal, compliance and corporate affairs, said his team spent years trying to register with the SEC. The commission appears to be moving forward with enforcement action against Robinhood’s crypto activities.
Finally, third takeaway: crypto investors will also benefit from FIT21.
The law would force crypto companies to disclose information about ownership and structure and require exchanges to keep company and customer funds separate, a clear nod to the chaos that caused the FTX collapse.
Basically some transparency for anyone looking to do business with a crypto company.
What are the chances?
But how likely is this to happen?
It has a good chance of getting out of the House, thanks to the Republicans’ general pro-crypto stance and their majority in the lower house.
However, the Senate, with fiery Democrat Elizabeth Warren leading the anti-crypto charge, will pose a greater obstacle.
Cracks within Warren’s coalition are appearing, however: Take a look at the 32 Democrats who crossed party lines to overturn regulatory guidelines which make holding crypto a costly and time-consuming endeavor for banks.
Liam Kelly is a DeFi correspondent at DL News. Do you have any advice? Email to liam@dlnews.com.