Regulation
US House Passes Cryptocurrency Bill Despite SEC Warnings
Item 1 of 2 Representations of the cryptocurrencies Bitcoin, Ethereum, DogeCoin, Ripple, Litecoin are placed on the PC motherboard in this illustration taken on June 29, 2021. REUTERS/Dado Ruvic/File Photo
[1/2]Representations of the cryptocurrencies Bitcoin, Ethereum, DogeCoin, Ripple, Litecoin are placed on the motherboard of the PC in this illustration taken on June 29, 2021. REUTERS/Dado Ruvic/File Photo Buy license rights, opens a new tab
May 22 (Reuters) – The U.S. House of Representatives on Wednesday approved a bill that seeks to create a new legal framework for digital currencies, despite an unusual warning from the U.S. securities regulator that it could create new financial risks.
The Republican-sponsored Financial Innovation and Technology for the 21st Century Act passed on a bipartisan vote of 279-136. It is unclear whether the Senate will take up the measure.
Supporters of the bill in the U.S. Congress argue that it will provide regulatory clarity and help promote growth in the industry.
The House approval comes as the U.S. Securities and Exchange Commission (SEC) reports that will probably approve the questions for spot ether exchange funds, giving the sector a surprising boost.
But SEC Chairman Gary Gensler said in a statement that the bill “would create new regulatory gaps and undermine decades of precedent in the oversight of investment contracts, exposing investors and capital markets to immeasurable risk.”
The bill was supported by cryptocurrency advocates and industry organizations that have long viewed Gensler’s SEC as an obstacle to broader adoption of digital assets.
Noticing high profile legal proceedingscases of fraud, failures and bankruptcies, Gensler argued that cryptocurrencies should be subject to the same laws as other assets.
In a statement Wednesday, he said that under the bill, investment contracts recorded on a blockchain would no longer be considered securities, denying investors the protections afforded by securities laws.
Among other criticisms, Gensler said the bill would also allow issuers of cryptocurrency investment contracts to self-certify that their products are digital commodities not subject to SEC oversight, giving the agency just 60 days to challenge that decision.
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Reporting by Douglas Gillison and Brad Brooks; Editing by Rod Nickel and Michael Perry
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