House Democratic leadership says vote on cryptocurrency bill will not be flogged

• Senior Democrats “strongly oppose” H.R. 4763, the Financial Innovation and Technology for the 21st Century Act (FIT21), but are not influencing the vote.

• FIT21, supported by digital asset organizations like Coinbase, provides a regulatory framework, defining digital assets and expanding the CFTC’s authority.

House Financial Services Committee Ranking Member Maxine Waters (D-Calif.) and House Agriculture Committee Ranking Member David Scott (D-Ga.) — the top Democrats on their respective committees — have emailed Democratic members of the House of Representatives saying they “strongly oppose” HR 4763, the Financial Innovation and Technology for the 21st Century Act (FIT21), but they are not criticizing their members against the bill Politico reported it.

Waters and Scott say they oppose the bill because it undermines established legal precedent and creates uncertainty in the traditional securities market.

“This language undermines decades of legal precedent and case law, thereby creating uncertainty in our traditional securities markets,” the Democratic Whip’s office wrote in an email, obtained for the first time by Politico.

The email states that the bill provides a safe harbor where entities can file an “intent to register” if they meet certain requirements, which, they argue, protects them from securities laws and regulations up to the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) develop new rules.

This “weakens investor protection and opens the door to fraud and market manipulation,” the email said.

A”dear colleagueThe letter posted on the House Financial Services Committee Democrats’ page delves into the two leaders’ opposition to the bill, calling it “an act not fit for purpose.”

A numbered list states that the bill would create a “pathway for ‘contractual investment assets’ without any alternative regulator, meaning virtually no laws or regulations would govern them.”

A Democratic aide told CoinDesk lawmakers would have a briefing with the SEC on Tuesday morning.

The bill, if signed into law, would prevent shareholders from suing publicly traded companies, preempt state regulations on digital assets, weaken fiduciary requirements and weaken capital markets, the letter said.

The email from the Democratic Whip’s office also urged lawmakers to vote against H.R. 192, a bill introduced by Majority Whip Tom Emmer (R-Minn.) to block the Federal Reserve from issuing a digital currency of the central bank. The bill has an “overly broad definition” of CBDC, the email said, and “raises concerns that the bill could undermine the Fed’s ability to conduct monetary policy.”

The story continues

FIT21 is supported by a coalition of digital asset organizations and companies, including Coinbase, Kraken, Andreessen Horowitz and 50 others, as it provides a regulatory framework for the digital asset industry, its supporters say, which is something that industry players currently lack United States.

The bill creates a definition for whether a digital asset is a security or a commodity, expands the CFTC’s authority to register and regulate digital commodities, and requires the CFTC and the SEC to jointly issue rules for assets not otherwise classified .

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