Regulation
Is House Bill FIT21 Really the Legislation Cryptocurrencies Need?
The House It voted 279 to 136 on Wednesday pass the much-lauded Financial Innovation and Technology for the 21st Century Act (FIT21), which was considered a major win for the industry considering this is the furthest any cryptocurrency-focused legislation has come so far in the United States. which saw the support of an overwhelming majority of Republicans and 71 Democrats, will now go to the Senate, although probably not this year.
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If passed, the bill would establish a regulatory framework for digital assets, helping to define when a given token is a security or a commodity. While the bill is expected to increase oversight of cryptocurrencies by the Commodity Futures Trading Commission, the Securities and Exchange Commission will likely continue to play a significant role in regulating the industry.
While many have said that the bill represents something of a turning point for cryptocurrencies in the United States, not everyone thinks it will go as planned.
“It doesn’t even move agencies; The SEC would still have enormous power. It provides for a dual regulatory regime, split between the SEC and the CFTC. It does so by giving the CFTC an authority it has never had: regulatory authority over a spot commodity market,” said Gabriel Shapiro, a cryptocurrency legal expert. said about X. “Man, we were so psycho on this FIT21 thing.”
“There has never been a commodity spot market that is *regulated* before… we are just handing this wholesale authority over to the CFTC and hope they are not crazy fascists like Gary (but he was head of the CFTC lol), “ Him added.
In other words, the bill is essentially a way for the government to sanction activities the industry has already carried out without permission and potentially set up an agency to interfere with what are supposedly free and open markets.
It was a point taken up by Stephen Palleyanother prominent legal voice in the cryptocurrency industry, who said he “doesn’t like it [it] at all.”
“It unnecessarily creates more jurisdiction for the CFTC over the spot and a walled garden for incumbents, among other things. But you assholes keep asking for new laws,” Brown Rudnick partner Palley added.
Ironically, Shapiro and Palley’s criticisms appear to align with those of Maxine Waters (D-CA), the ranking Democrat on the House Financial Services Committee, who said it is one of the worst bills she has ever seen. In addition to potentially stretching the resources of the CFTC, which only has about 700 employees compared to the SEC’s 4,500, this could also undermine other legislative efforts, such as the stablecoin bill that Waters worked on alongside House Financial Services Chairman Patrick McHenry (R-NC). .
“Let me let you [in] about a secret that big cryptocurrencies don’t want you to know even under this bill,” Waters said. “The CFTC does not have enough authority to regulate cryptocurrencies in this bill.”
Likewise, SEC Chairman Gary Gensler said the effort would create more confusion and regulatory gaps than it would close. Gensler has argued for years that the law is clear and that there should be no rules tailored to cryptocurrencies.
Regardless, many in the cryptocurrency industry saw the bipartisan vote as a symbolic vote for cryptocurrencies themselves, perhaps a harbinger of a better future. The move comes just days after the House and Senate voted to repeal the law controversial SEC accounting rulewhich in itself was seen as a sign that sanity will ultimately prevail.
If there’s a silver lining, many experts believe FIT21 will likely die in the bud. T. D. Cowen, for example, said a few weeks ago that the bill had “no chance of becoming law in this Congress.” So maybe this is a psychological operation worth celebrating?