House approves bill FIT21 to provide crypto legal clarity with two-thirds majority

The US House of Representatives on Monday passed legislation that will provide much-sought-after legal clarity on how crypto assets should be classified, registered and custodial.

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

A “historic” step for crypto regulation

Crypto industry leaders widely praised the legislation as a first step toward clear and purposeful rules related to the trading and registration of digital assets.

“Americans want to know that their representatives are protecting their rights to use crypto, creating clear rules to protect consumers, and not allowing the lack of clarity to be weaponized by a few administration activists trying to kill il… legally an industry”. he tweeted Coinbase CEO Brian Armstrong on Wednesday ahead of the vote.

According to one of the bill’s authors, French Hill (R-AR), the legislation includes an interim oversight process for digital asset companies by which they can file a “notice of intent to register” with regulators federal as rules on how agencies divide industry responsibility is over.

“This bill imposes strict consumer protections that prevent the commingling of customer funds,” Hill added, noting that it 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 Commodities and Futures Trading Commission (CFTC), both of which have disputed their legitimate industry jurisdiction for years.

What the Democrats think of FIT21

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

SEC Chairman Gary Gensler also criticized the bill, claiming that the laws on the books are enough to regulate crypto and that the industry simply refuses to comply. “We must make the political choice to protect the investing public rather than facilitate the business models of non-compliant companies,” he argued.

A significant number of Democrats supported the bill, however, urging members of his party to do the same to help the nation keep pace with rivals in crypto regulation and progress. “This is not a perfect bill, but I think it’s a good step in the right direction,” said Rep. Yadira Caraveo (D-CO) on the issue.

The Biden administration said he was opposed to FIT21 before the vote, but that he would work with Congress on a “comprehensive and balanced regulatory framework for digital assets.”

Notably, the administration did not indicate an intention to veto the bill if it passes both chambers, as it has done with recent crypto legislation surrounding crypto banking. As with FIT21, the legislation passed the House with bipartisan support.

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