June 5, 2024
Policy & Regulation

Biden Administration and SEC Oppose FIT21 Crypto Legislation

United States President Joe Biden and Securities and Exchange Commission (SEC) Chair Gary Gensler oppose H.R. 4763, the Financial Innovation and Technology for the 21st Century (FIT21) Act, ahead of a critical House vote.

In a May 22 notice, the Biden administration argued that the bill “lacks sufficient protections for consumers and investors who engage in certain digital asset transactions.”

SEC Chair Gensler Warns of Regulatory Gaps

Shortly after the White House statement, Chair Gensler released his statement. He claims that FIT21 would “create new regulatory gaps” and potentially destabilize U.S. capital markets if enacted. 

He supported his position by referencing a January Chainalysis report. The report highlighted the consequences of “widespread noncompliance” in the crypto industry, resulting in fraud, bankruptcies, and misconduct. 

“The crypto industry’s record of failures, frauds, and bankruptcies is not because we don’t have rules or because the rules are unclear. It’s because many players in the crypto industry don’t play by the rules.”

Chair Gary Gensler Statement

Legislative Implications and Future Steps

The FIT21 Act, set for a House vote on May 22, aims to clarify the roles of the SEC and Commodity Futures Trading Commission in digital asset regulation. Industry leaders and lawmakers have pointed to the lack of regulatory clarity as a factor driving some companies out of the U.S. or into risky compliance situations with the SEC.

The White House expressed a willingness to collaborate with Congress on an alternative bill to create a robust regulatory framework for crypto. President Biden suggested he would consider a veto of FIT21 if passed but emphasized openness to working on future legislation.

The House vote on FIT21 comes with a Republican slim majority, but bipartisan support has been indicated, with Representatives Wiley Nickel (D) and French Hill (R) publicly backing the bill.

With the Biden administration and SEC opposing FIT21, the future of crypto regulation remains uncertain. The upcoming House vote will determine the bill’s fate amidst these significant concerns.

Image from Picryl

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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