The House of Representatives has passed landmark digital assets legislation, shifting the crypto regulation debate to the Senate, where prospects for swift action remain uncertain.
The House approved the Financial Innovation and Technology for the 21st Century Act (FIT21) with a 279-136 vote, marking a significant legislative achievement for the crypto industry. This vote saw substantial Democratic support, with 71 Democrats joining 208 Republicans in favor, while 3 Republicans and 133 Democrats opposed the bill.
FIT21 represents the first major crypto bill to clear a chamber of Congress, setting the stage for potential regulatory framework for digital asset markets. However, the bill’s future in the Senate is unclear due to the absence of a counterpart bill and limited committee action on crypto regulation.
Rep. Josh Gottheimer (D-N.J.), one of the Democrats backing the bill despite opposition from the White House and Rep. Maxine Waters (D-Calif.), described it as well-reasoned and bipartisan. Gottheimer emphasized the need for clear regulations, calling the legislation a step toward providing “rules of the road” for the industry.
Despite this legislative win, the U.S. remains behind other global jurisdictions in establishing crypto regulations. President Joe Biden opposed the bill, though he did not threaten a veto as he did with recent congressional efforts to overturn SEC crypto accounting policies. SEC Chair Gary Gensler also criticized the bill, arguing it was unnecessary and potentially harmful to existing securities regulations.
The FIT21 Act, driven primarily by House Republicans, aims to regulate U.S. crypto markets by establishing consumer protections, designating the Commodity Futures Trading Commission (CFTC) as the primary regulator for digital assets and non-securities spot markets, and defining criteria for crypto tokens as securities or commodities.
Rep. Maxine Waters argued against the bill, accusing it of allowing crypto businesses to evade securities laws and legitimizing previously unlawful activities. Waters stated, “They have already made billions of dollars unlawfully issuing or facilitating the buying and selling of crypto securities, and Republicans are now proposing to reward these illegal activities by making these activities legal.”
Before the vote, the House debated several amendments to the bill. Notably, an amendment by Rep. Greg Casar (D-Texas) to reduce a crowdfunding exemption from $75 million to $5 million was defeated, while other amendments were adopted.
The passage of FIT21 marks a crucial step for the crypto industry, but the journey towards comprehensive regulation is far from over as the Senate takes up the debate.
