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On Wednesday, the House of Representatives passed the FIT21 bill with a 279-136 vote. This bill aims to set a clear regulatory framework for crypto assets.
The vote saw bipartisan support, with 71 Democrats, including former House Speaker Nancy Pelosi, joining 208 Republicans in favor of the FIT21 bill.
Patrick McHenry, Chair of the House Financial Services Committee, noted that the bill would “cement the United States’ global leadership” in technological innovation, invention, and adoption.
However, the White House and SEC Chair Gary Gensler have expressed concerns about the bill’s potential impact on investor protections.
Opposition in certain corners
The White House released a notice stating that the administration under President Joe Biden opposes the passing of the H.R.4763 bill containing FIT21, though it does not threaten to veto it. According to the notice, H.R.4763 “lacks sufficient protections” for consumers and investors involved in certain digital asset transactions.
Meanwhile, according to SEC Chair Gary Gensler, FIT21 could “create new regulatory gaps” and “undermine decades of precedent” regarding investment contract oversight. The SEC chair believes it would put investors and capital markets at risk.
The bill aims to bring most crypto assets that are sufficiently decentralized under the Commodity Futures Trading Commission’s (CFTC) purview rather than the SEC.
Gensler added that the bill would allow issuers of crypto investment contracts to self-certify their products as “decentralized” systems, classifying them as “digital commodities” and thus exempt from SEC oversight.
Concerned approach to regulations
This legislative move follows the Senate’s decision to join the House in passing a measure to repeal the SAB121 rule from the SEC.
Despite the White House’s opposition, the administration has expressed a willingness to collaborate with Congress to ensure balanced regulations for cryptocurrencies. An excerpt from the White House notice stated that the administration is “eager to work with Congress” to ensure a comprehensive and balanced regulatory framework for digital assets.
If President Biden decides to veto the FIT21 bill, it could still become law if the House and Senate override the veto with a two-thirds majority vote.
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