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The US House of Representatives will make significant progress this week on a landmark bill that aims to alter the laws concerning cryptocurrencies. Credible reports indicate that Congress will introduce the Financial Innovation and Technology for the 21st Century Act, or FIT21 Act, on May 22, 2022. This month, the Rules Committee gave the go-ahead for FIT21 to go to a vote after it had already passed the House Agriculture and Financial Services Committees last summer. This bipartisan legislation has attracted support from both Democrats and Republicans, with 11 co-sponsors, including Henry Cuellar from Texas, Ritchie Torres from New York, and Wiley Nickel from North Carolina. Its aim is to provide much-needed regulatory certainty for digital assets. Another essential feature of the proposed bill is the establishment of shared regulatory powers between two regulatory bodies—the SEC and the CFTC. Notably, this legislation would give the CFTC the authority to regulate digital commodity markets, such as exchanges and broker-dealers. The FIT21 Act aims to introduce future clarity for digital assets by stating that the mere existence of an investment contract does not automatically convert a token into a security. This clarification has the potential to influence numerous legal conflicts with the SEC regarding token issuers and crypto exchanges. The fact sheet published with the bill states that about 70% of all crypto tokens are commodities. The FIT21 Act has been formulated despite encountering opposition from certain members of the House. Most notably, some Democrats have voiced their concerns that the bill may limit the SEC too much. Late last summer, Representative Jonathan Jackson of Illinois said he doubted the bill would make a difference and even suggested an amendment that would exclude a clause that allows firms to avoid many SEC actions by simply filing what is known as a “notice…

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Filed under: News - @ May 21, 2024 3:18 pm