U.S. House of Representatives Passes Landmark Crypto Bill

by

As a seasoned crypto investor with a deep understanding of the industry’s intricacies and the regulatory landscape, I view this development as a significant step forward for the crypto community in the United States. The House passing the Financial Innovation and Technology for the 21st Century Act (FIT21) represents our collective efforts to bring transparency, accountability, and regulation to the crypto markets.

On Wednesday, the crypto sector secured its biggest-ever triumph in U.S. policy with the House passing a comprehensive law to oversee digital asset markets. This significant vote garnered support from both sides of the aisle, resulting in 279 votes in favor and 136 against. The newly passed crypto market regulation bill signifies the industry’s most significant legislative achievement in Congress so far.

 

Financial Innovation

As a researcher studying the regulatory landscape of cryptocurrencies, I can report that the Financial Innovation and Technology for the 21st Century Act (FIT21) marked a significant milestone by securing approval in the US House of Representatives. This bill represents the first major crypto legislation to advance through one chamber of Congress. However, its journey is far from over as it now moves on to the U.S. Senate.

“According to Rep. Josh Gottheimer (D-N.J.), a Democratic supporter of the bill despite opposition from the White House and Rep. Maxine Waters (D-Calif.), the top Democrat on the House Financial Services Committee, this legislation is “carefully crafted, logical, and backed by both parties.” He emphasized the importance of working together to turn it into law.”

The legislative bill received support from a total of 71 Democrats and 208 Republicans. Conversely, 3 Republicans and 133 Democrats expressed their opposition to the bill.

Jake Chervinsky, a lawyer advocating for cryptocurrency, expressed on X that a significant number of Democratic congressmembers have voted against the SEC, signaling to the Biden administration that an anti-crypto stance could be unsuccessful in this year’s elections.

The large number of Democrats who backed the bill indicates their reluctance to lose the support of pro-crypto Americans during the upcoming election season.

 

Biden and Gensler Opposed

As an analyst, I would rephrase it as follows: I. The President took a stance against the bill passing, but he didn’t issue a veto threat, unlike the previous attempt by Congress to reverse an SEC policy concerning crypto accounting. II. SEC Chair Gary Gensler voiced his opposition to the legislation. He believed it was redundant and posed a risk to existing securities regulations.

As a crypto investor, I’d express it this way: Gensler penned down his concerns about the Financial Innovation and Technology for the 21st Century Act (FIT 21), stating that this legislation could create new loopholes in regulation and disrupt long-standing investment contract oversight. This potentially exposes investors like myself to significant risks, endangering both our investments and the entire capital market.

Initially, the proposed legislation aims to exempt investment contracts registered on a blockchain from the existing definition of securities under federal law and the established safeguards that come with it.

Additionally, the proposed legislation indicates that certain crypto investment contracts should be excluded from the definition of securities in accordance with previous judicial decisions. However, this recognition has been contested by some market participants in the crypto sphere.

As a crypto investor, I can tell you that recent legislative efforts are focused on bringing clarity and regulation to the U.S. crypto markets. Driven primarily by House Republicans, these proposals aim to establish consumer protections, appoint the Commodity Futures Trading Commission (CFTC) as the leading regulatory body for digital assets, and provide clear definitions regarding the classification of crypto tokens as securities or commodities.

Rep. Maxine Waters contended that the legislation would provide a get-out-of-jail-free card for crypto companies that have circumvented securities regulations. “These businesses have illegally amassed fortunes by dealing with crypto securities,” she stated. “And now, Republicans want to grant them legitimacy for their past lawless actions.”

As a researcher, I’d describe it this way: Prior to casting our votes on the bill, my House colleagues and I deliberated over several proposed amendments. Among these were suggestions from Reps. Greg Casar of Texas, Brittany Pettersen of Colorado, Ralph Norman of South Carolina, and Scott Perry of Pennsylvania. The amendment put forward by Rep. Casar to adjust the crowdfunding exemption from $75 million to $5 million unfortunately did not pass. However, the remaining amendments were approved.

 

The Bill

FIT21 will protect consumers by strengthening transparency and accountability with market participants:

  • Digital asset developers will be required to provide accurate, relevant disclosures, including information relating to the digital asset project’s operation, ownership, and structure; and
  • Digital asset customer-serving institutions, like exchanges, brokers, and dealers will be required to:
    • Provide appropriate disclosures to customers;
    • Segregate customer funds from their own; and
    • Reduce conflicts of interest through registration, disclosure, and operational requirements.

FIT21 will strengthen the market by protecting digital asset projects:

  • Digital asset developers will have a pathway to raise funds; and
  • Participants will have a clear process to determine which digital asset transactions are subject to the SEC’s jurisdiction and the CFTC’s jurisdiction.

FIT21 will protect digital asset customer-serving institutions by:

  • Establishing clear lines between the SEC and CFTC; and
  • Creating comprehensive registration regimes to permit them to lawfully serve customers in digital asset markets.

 

Trump Embraces Crypto

During the past few days, President Trump’s re-election campaign has started accepting cryptocurrency donations on its platform. The campaign’s site boasts, “Witness President Trump’s triumph as an advocate for American liberty and progress. We welcome your contribution to our cause through digital currency. Help save our country from Biden’s setbacks. As Biden imposes more regulations and bureaucracy, Trump is prepared to harness new technologies, revitalizing America.” The website enables contributors to donate amounts such as $20.24, $45, $47, $2024, or $4547.

Read More

2024-05-23 04:54