House Passes FIT21 Bill To Provide Crypto Legal Clarity With Two Thirds Majority

The US House of Representatives on Monday passed legislation that will provide long-awaited legal clarity on how crypto assets are classified, registered and custody.

The bill, titled the Financial Innovation and Technology for the 21st Century (FIT21) Act, received near-unanimous support from Republicans along with an additional 71 votes from Democrats, leading to a final score of 279 “yes” to 136 “no.”

A “historic” step to regulate cryptocurrencies

Cryptocurrency industry leaders widely hailed the legislation as a first step towards clear, fit-for-purpose rules regarding the trading and registration of digital assets.

“Americans want to know that their representatives are protecting their rights to use cryptocurrencies, setting clear rules to protect consumers, and will not allow a lack of clarity to be weaponized by a few activists in the administration who are trying to illegally kill the industry.” chirp Coinbase CEO Brian Armstrong on Wednesday, before the vote.

According to one of the bill's authors, French Hill (R-AR), the legislation includes a temporary oversight process for digital asset companies where they can submit a “Notice of Intent to Register” with federal regulators as rules on how agencies divide up their responsibilities. The industry is finished.

“This bill imposes strict consumer protections that do not allow customer funds to be commingled.” He added Hill, noting that this would help prevent another FTX-like collapse.

It also helps clarify which digital assets should be regulated by the Securities and Exchange Commission (SEC) versus the Commodity and Futures Trading Commission (CFTC), both of which have squabbled over their legal jurisdiction in the industry for years.

What Democrats are thinking about FIT21

In contrast to the bill's Republican supporters, Democrats on the House Financial Services Committee said the bill would benefit “wealthy cryptocurrency companies that have chosen not to register with the Securities and Exchange Commission (SEC),” while hurting “ordinary investors trying to build wealth.” “

SEC Chairman Gary Gensler also criticized the bill, claiming that the laws on the books are sufficient to regulate cryptocurrencies, and that the industry simply refuses to comply with them. “We should choose policy to protect the investing public rather than facilitate business models for non-compliant companies,” he said.

A large number of Democrats He supported the billHowever, they urged their party members to do the same to help the nation keep up with competitors in cryptocurrency regulation and progress. “This is not a perfect bill, but I think it is a good step in the right direction,” said Rep. Yadira Caraveo (D-Colo.).

Biden administration He said he opposes FIT21 Before the vote, it will work with Congress on a “comprehensive and balanced regulatory framework for digital assets.”

Notably, the administration has not indicated its intention to veto the bill if it passes through both chambers, as happened with recent cryptocurrency legislation around crypto banking. As with FIT21, the legislation passed the House with bipartisan support.