A bill that would clarify the role of the U.S. securities and commodities regulator in policing cryptocurrencies is heading toward an unknown future as it makes its way to the Senate before reaching U.S. President Joe Biden’s desk.
The Republican-led 21st Century Financial Innovation and Technology Act (FIT21) (HR 4763) passed the House of Representatives on May 22 with 71 Democrats, 208 Republicans in favor, and 136 against.
Its future in the Senate is unclear due to the lack of relevant legislation and a clash with Elizabeth Warren, one of the nation’s leading crypto critics, but the same Senate passed a resolution last week calling for the repeal of rules restricting the business activities of banks and crypto companies.
It could still be several months before the 100-member Senate considers FIT21. There is no time constraint on when senators must act on FIT21.
Even if it passes, the bill will likely be sent to committee for multiple rounds of review, hearings and amendments, and even if it does make it through, it would need the support of a majority of the 51 senators to pass.
Some parts of FIT21 may change, and members of the House and Senate will meet to iron out differences in their respective bills. The bill will then be sent back to the House and Senate for final approval.
President Biden will then have 10 days to decide whether to sign or veto FIT21. However, although his administration said on May 22 that it would oppose passage of the bill, he did not say he would veto it.
Even if Mr. Biden vetoes FIT21, the House and Senate could pass the bill in both chambers with at least a two-thirds majority, potentially overriding Mr. Biden.
Industry cheering passage
On May 22, SEC Chairman Gary Gensler publicly opposed FIT21, stating that it would create “new regulatory gaps” and threaten the stability of capital markets. The House passage of the bill is seen by many as an early victory for cryptocurrencies.
Coinbase CEO Brian Armstrong explained In addition to the bill’s passage, 71 Democrats voted in favor of it, making it a “complete victory” and a win for “clear cryptocurrency rules.”
“That’s a huge number of Democrats who voted ‘no confidence’ in the current SEC.” Said Jake Chervinski, general counsel for the Valiant Foundation;
However, cryptocurrency lawyer Gabriel Shapiro poured cold water on the celebrations. Discuss As for X, FIT21 would still give the SEC “significant authority.”
Related: Ethereum ETF approval becomes a “huge political issue” — Joseph Rubin
“The bill creates a dual regulatory regime for the SEC and the CFTC,” he added. “It does this by giving the CFTC authority it did not have before – regulatory authority over spot commodity markets.”
FIT21 has handed most of its oversight of cryptocurrencies over to the Commodity Futures Trading Commission, which the industry sees as a more relaxed regulator than securities regulators.
However, while the SEC will have regulatory authority over cryptocurrencies that are not sufficiently decentralized, FIT21 will also create a way for cryptocurrencies to be sold as products after being considered securities.
magazine: Fear and doubt among lawmakers drive proposed US cryptocurrency regulations
