The US House Financial Committee has aligned with billionaire Mark Cuban’s critique of the Securities and Exchange Commission’s (SEC) approach to the crypto industry.
In a May 11 social media post, the Committee explained why Congress must pass the Financial Innovation and Technology for the 21st Century (FIT21) Act.
US House Committee Believes FIT21 Act Will Solve Crypto Regulatory Issues
This weekend, Cubans took to social media to express concerns about how the SEC’s stance against cryptocurrencies might affect President Joe Biden’s reelection bid. Cuban continued his criticism of the financial regulator in a May 11 social media post, saying the commission and its chair, Gary Gensler, were “trying to destroy the crypto industry.”
“The crypto industry wants a way to register and comply. It wants a way to keep the speculative noise out. Instead the SEC makes it so expensive, time consuming and difficult for those who want to comply, that the junk tokens are side by side with real companies and investors have no way to know what is garbage and what is real,” Cuban added.
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In response, the US House Financial Committee acknowledged Cuban’s concerns, noting that the SEC’s current approach hampers the industry’s ability to comply. So, the Committee is pushing the FIT21 Act to address these regulatory gaps.
The committee believes the legislation would provide much-needed clarity and consumer protections. The law would also end the SEC’s regulation by enforcement approach and enable the US digital asset ecosystem to flourish.
Furthermore, the forthcoming legislation aims to clearly define the responsibilities of both the Commodity Futures Trading Commission (CFTC) and the SEC. Under the proposed legislation, the CFTC will extend its oversight to encompass crypto commodities, while the SEC’s regulatory domain will be clarified concerning cryptocurrencies offered as investment contracts.
“The Financial Innovation and Technology for the 21st Century Act is the culmination of years of bipartisan efforts to finally provide clarity…This legislation will cement American leadership of the global financial system for decades to come and bolster our role as an international hub for innovation,” said House Financial Services Committee Chairman Patrick McHenry.
Notably, efforts to advance the FIT21 Act have been ongoing since its committee approval in July 2023, with a push for a floor vote expected in the coming weeks. Interestingly, the bill has garnered support from major crypto stakeholders. Bitcoin ETF issuer Grayscale said the proposed law “is a welcome effort to achieve regulatory clarity for the crypto ecosystem.”
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Similarly, Matt Corva, the General Counsel at Consensys, said that the regulation would help clear the regulatory messes created by federal agencies.
“Regulation could be timely to clean up the mess created by agencies outside their authority and the APA who have been left unchecked for too long. It won’t be [without] compromise, but sensible regulation will move the ball forward for market participants, innovators, and consumers,” Corva remarked.
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