US House greenlights FIT21 crypto bill amid bipartisan agreement
Proponents of the bill, primarily Republicans, believe that current regulations are outdated and impede innovation in the rapidly evolving crypto sector
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The US House of Representatives passed the Financial Innovation and Technology for the 21st Century Act (FIT21) on May 22. The legislation, primarily driven by House Republicans, aims to establish a regulatory framework for the U.S. crypto markets. It includes consumer protections, appointing the primary regulator of digital assets and the overseer of non-securities spot markets—the Commodity Futures Trading Commission (CFTC)—and clarifying the distinctions between crypto tokens as securities or commodities.
71 Democrats and 208 Republicans voted in favour of the bill, while 3 Republicans and 133 Democrats opposed it. President Joe Biden opposed the bill in a policy statement but did not indicate he would veto it, unlike his recent stance when Congress tried to overturn an SEC effort to set a crypto accounting policy.
In statements released on Wednesday, the White House and SEC Chair Gary Gensler opposed the FIT21 bill. If enacted, the bill would potentially shift regulatory oversight, proposing that crypto assets deemed sufficiently decentralised should come under the jurisdiction of the CFTC, not the SEC.
Gensler expressed concerns that the FIT21 Act might introduce new regulatory gaps and potentially undermine longstanding precedents related to the oversight of investment contracts, posing significant risks to investors and capital markets. He highlighted that the bill proposes removing investment contracts recorded on a blockchain from the statutory definition of securities, which would exclude them from many of the established protections under federal securities laws.
