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The US Congress will potentially vote on new legislation for the cryptocurrency industry by the end of May
Chairman of the House Financial Services Committee Patrick McHenry said new legislation that will give the cryptocurrency industry greater clarity regarding regulatory oversight is scheduled for a potential vote in the House by the end of May.
The proposed legislation – called the Financial Innovation and Technology for the 21st Century (FIT21) Act – aims to provide clear regulatory frameworks for digital assets, addressing long-standing issues related to market oversight and consumer protection.
Much needed legislation
McHenry said May 10th that the vetting process will give “much-needed legislation the time it deserves”.
He added:
“For too long, the U.S. digital asset ecosystem has been plagued by regulatory uncertainty that has stifled innovation and left consumers unprotected.”
Sheila Warren, CEO of the Crypto Council he explained it the exam will take place during the week of May 20th.
The House Rules Committee, made up of nine Republicans and four Democrats, will likely review the legislation under a “structured rule” that determines which amendments can be considered and the amount of time set for debate on each part.
The commission will determine whether FIT21 should go to a floor vote by the end of May. The bill must also pass through the Senate and the President.
SEC-CFTC distinction
FIT21 grants the CFTC jurisdiction over cryptocurrencies and grants the SEC jurisdiction over cryptocurrencies offered in investment contracts.
The legislation explicitly seeks to establish “clear lines between the SEC and the CFTC.” The SEC’s ever-expanding enforcement efforts have become highly controversial in recent years, and as such, FIT21 could face one of the highest profile controversies in the cryptocurrency industry.
The distinction is intended to help cryptocurrency developers with a way to raise funds and clarify whether their activities are subject to CFTC or SEC oversight.
In addition to separating the roles of regulators, the bill also creates a process to allow cryptocurrencies first offered in an investment contract to be traded on the secondary market.
FIT21 also establishes rules for companies to register with the SEC and CFTC, including requirements regarding customer disclosure, asset protection, and operations.
House Agriculture Committee Chairman Glenn Thompson, Whip Tom Emmer, and Representatives French Hill, Dusty Johnson, and Warren Davidson introduced the bill in July 2023.