Regulation
US Lawmakers Seek to Clean Up Crypto Regulation ‘Food Fight’
Defenders of digital currencies say regulators are stuck in the past.
The U.S. House of Representatives on Wednesday passed a bill that would create a new legal framework for digital currencies, a move praised by crypto supporters but opposed by consumer groups who say it fails to protect investors.
The Republican-backed Financial Innovation and Technology for the 21st Century Act, known as FIT21, would split responsibility for regulating cryptocurrencies between the Securities and Exchange Commission and the Commodities Futures Trading Commission.
The bill would strengthen the CFTC’s regulatory authority and weaken the SEC’s oversight of digital assets. The SEC opposes it and faces a steep climb in the Democratic-controlled Senate.
Defenders of digital currencies have argued that regulators are stuck in the past and enforcing rules inadequate to oversee the explosion in popularity of cryptocurrencies.
House Republicans say FIT21 would increase oversight of the rapidly growing digital asset space, increasing transparency and accountability for crypto exchanges, brokers and dealers.
“The SEC and CFTC are currently engaged in a fierce battle for control of this asset class,” Republican Patrick McHenry, chairman of the House Financial Services Committee, said in a statement.
“They have created an impossible situation in which the same companies are subject to competing and conflicting enforcement actions from two different agencies.”
SEC Chairman Gary Gensler warned that the bill would “create new regulatory gaps and undermine decades of precedent for oversight of investment contracts, exposing investors and capital markets to risks immeasurable.”
It said in a statement that investment contracts recorded on a blockchain would no longer be considered securities under the legislation, thereby removing them from SEC oversight and denying investor protection.
“Failure, fraud and bankruptcies”
Crypto companies would be able to self-certify their investments and products as falling under a special class of “digital products” under the legislation, Gensler said, arguing that would allow them to avoid scrutiny scrutiny of the SEC.
“The crypto industry’s record of failure, fraud and bankruptcy is not because we don’t have rules or because the rules aren’t clear,” he said. added.
“This is because many in the crypto industry are not following the rules. We should make the political choice to protect the investing public rather than facilitating the business models of non-compliant companies.”
A group of 30 consumer rights organizations wrote to congressional leaders opposing the bill on the grounds that it undermines a long-standing legal framework used to determine whether a transaction must meet strict consumer safeguards. investors.
“Much of this bill seeks to circumvent these standards, in part by creating an expedited, automatic approval process to designate crypto assets as “commodities,” thereby limiting the enforcement of securities regulations to these assets and associated stakeholders,” they wrote in the letter dated Monday.
But 60 crypto organizations signed a letter of support for the bill, which is also backed by former US President Donald Trump, who is running for re-election and recently said he would begin accepting crypto campaign donations.
“Regardless of what some critics claim, this bill does not create a ‘light touch’ regime for crypto scammers or prevent the SEC from policing its markets,” said Congressman French Hill, who chairs the Subcommittee on Digital Assets.
The Biden administration said it was “desirous to work with Congress to ensure a comprehensive and balanced agreement.” regulatory framework For digital assets” but added that he was opposed to Invoice because it lacks “sufficient protections for consumers and investors”.
© 2024 AFP
Quote: US Lawmakers Seek to Clean Up Crypto Regulation ‘Food Fight’ (May 23, 2024) Retrieved May 23, 2024 from https://techxplore.com/news/2024-05-lawmakers-crypto-food.html
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