House passes first Crypto legislation

by | May 23, 2024

On Wednesday, the House passed a significant piece of legislation aimed at providing regulatory clarity for the cryptocurrency industry.

The Financial Innovation and Technology for the 21st Century Act, or FIT 21, was approved by a vote of 279-136, with 71 Democrats supporting the bill.

Earlier that day, the Biden administration issued a policy statement opposing the bill's passage, though it did not go so far as to threaten a veto.

The legislation establishes a framework for cryptocurrencies that have achieved sufficient decentralization to be traded and used by Americans. It also clarifies which tokens fall under the jurisdiction of the U.S. Securities and Exchange Commission (SEC) and outlines how these projects can attain regulated status with the agency.

While the SEC has frequently stated its willingness to meet with crypto projects to find a regulatory path forward, crypto companies claim these efforts have been unproductive. Last year, the agency released a list of cryptocurrencies that had registered, but in nearly every instance, the registration was part of legal action by the SEC that ultimately led to the company being shut down.

Congress has already sent the White House a piece of legislation addressing how firms should account for cryptocurrency when providing custodial services. The White House will likely view this recent vote as a gauge of Democratic support to help decide whether to veto that legislation.

The legislation now moves to the Senate, which recently passed a much simpler piece of cryptocurrency-related legislation. However, the Senate also includes Washington's most prominent crypto critic, Elizabeth Warren.      

 

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