Regulation
The House approves a law in favor of cryptocurrencies
Top line
The House passed legislation Wednesday night that would give oversight authority over most forms of cryptocurrency to a more industry-friendly agency, potentially putting President Joe Biden in the difficult position of deciding whether to go against his own president of the SEC and reject a veto as former President Donald Trump courts the industry in his 2024 presidential campaign.
The White House said Wednesday it “opposes” the legislation, but stopped short of telling the President… [+] Joe Biden would veto the bill.
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Main aspects
The House voted 279-136 to pass the Financial Innovation and Technology for the 21st Century Act, with 71 Democrats and 208 Republicans voting in favor of the legislation.
The legislation would place most forms of cryptocurrency, including bitcoin, under the regulatory purview of the Commodity Futures Trading Commission, classifying them as commodities, rather than securities that would fall under the authority of the Securities and Exchange Commission, which performed a crackdown on industry under Biden.
Lawmakers who supported the bill touted it as a way to clarify regulatory authority for digital assets, with the chairman of the subcommittee on digital assets, Rep. French Hill, R-Ark., calling it perhaps “ the most substantial piece of digital assets legislation in the history of Congress.” He he told Forbes previously, noting that Trump supports the bill.
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Chief critic
The SEC’s crackdown on cryptocurrencies, which includes a series of charges against companies and individuals accused of violating federal regulations, has become a new line of attack for Trump against Biden as the former president courts cryptocurrency supporters, telling them during a dinner at Mar-A-Lago earlier this month “better vote” for him, Politico reported it. SEC Chairman Gary Gensler opposed the House legislation, arguing on Wednesday would allow cryptocurrency issuers to “self-certify” that they are issuing cryptocurrencies as a commodity rather than a security, giving the SEC a limited 60-day window to review the classification.
Crucial quote
“The self-certification process envisaged by the bill puts investor protection at risk not only in the cryptocurrency sector; could undermine the broader $100 trillion capital markets by providing a path for those seeking to escape robust disclosures, prohibitions that prevent the loss and theft of client funds, SEC enforcement, and private rights of action for investors in federal courts,” Gensler said Wednesday.
Tangent
Trump’s campaign he began to accept cryptocurrency donations on Tuesday, urging his supporters to make the announcement to “build a cryptocurrency army.”
What we don’t know
If the Democratic-controlled Senate approves the legislation. Eight House Democrats who supported the bill urged their Senate colleagues to support it in a memo Tuesday, CoinDesk reported. In a potential indicator of the House bill, 11 Senate Democrats, including Majority Leader Chuck Schumer, D-N.Y., voted alongside Republicans earlier this month to roll back Crypto SEC regulations, splitting with Biden, who has said he will veto the bill, which also passed the House with bipartisan support.
Key background
Trump has embraced cryptocurrencies after criticizing the industry during his time as president, tweet in 2019 that he is “not a fan of Bitcoin and other cryptocurrencies, which are not money and whose value is highly volatile and based on nothing.” Since then he has launched a line of NFT “trading cards” with his likeness and his net worth of $7 billion includes approximately $3 million in digital assets, according to Forbes March estimate. The Biden administration, meanwhile, has taken a measured approach to cryptocurrencies, recognizing their explosive growth and the need for the United States to “maintain technological leadership in this rapidly growing space,” while also warning that it “has implications substantial for consumer protection, financial stability”. , national security and climate risk,” the White House wrote in a Executive Order of 2022.
Further reading
The House will vote on who will regulate cryptocurrencies (Forbes)
Trump’s campaign now accepts cryptocurrency donations (Forbes)