A step ahead for crypto: US House passes bill for regulations despite warnings from SEC

A step ahead for crypto: US House passes bill for regulations despite warnings from SEC

The United States House of Representatives passed a crypto market structure bill aimed at regulating the industry as a whole, marking the first time comprehensive crypto legislation has been voted on by the whole House.

The Republican-sponsored Financial Innovation and Technology for the 21st Century Act passed with a bipartisan vote of 279 to 136. It is unclear whether the Senate will take up the legislation.

“Today’s vote demonstrates the bipartisan nature of digital assets and reaffirms that FIT 21 can greatly improve upon the status quo by providing much needed regulatory clarity,” said the Crypto Council for Innovation.

“FIT21 will cement the United States’ global leadership in technological innovation, invention, and adoption,” said House Financial Services Committee Chair Patrick McHenry.

FIT21 would give the Commodity Futures Trading Commission new authority and funds to manage cryptocurrency spot markets and “digital commodities,” primarily bitcoin. The bill also establishes a framework for the secondary market trading of digital commodities that were “initially offered as part of an investment contract.” 

The measure also includes provisions dealing with stablecoins and anti-money laundering. Though FIT21 is unlikely to be introduced in the Senate this year, the legislation might pave the way for the next Congress in January. 

The Blockchain Association’s head of government affairs, Ron Hammond, stated that Congress’s perception of cryptocurrency is shifting.

“In the past 48 hours, we’ve seen crypto grassroots and political forces result in a seismic shift in opinion of the industry here in DC,” Hammond told The Block. “This view of the industry seems to not only be shifting opinions of the industry in Congress ahead of the FIT21 vote, but potentially rolling back the regulatory barriers the SEC Chair has tried to build his legacy around.”

FIT21 is “a massive turning point,” according to Hammond.

House Financial Services Committee Ranking Democrat Maxine Waters told the House Rules Committee on Tuesday that FIT21 was one of the worst laws she had ever seen. 

According to Waters, FIT21 would strain the CFTC’s resources, reducing the agency’s ability to enforce industry regulations. According to its website, the SEC employs 4,500 people, whereas the CFTC employs only about 700,  as per a fiscal year 2024 budget sheet.

“Let me let you on a secret that the big crypto doesn’t want you to know even under this bill,” Waters said. “The CFTC does not get enough authority to regulate crypto in this bill.” 

The White House contends that the plan does not provide sufficient customer protection. However, they will collaborate with Congress to guarantee that cryptocurrency regulations run smoothly.

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