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US House Finance Committee criticizes SEC’s crypto approach
The US House Finance Committee has aligned itself with billionaire Mark Cuban’s criticism of the Securities and Exchange Commission’s (SEC) approach to the cryptocurrency industry.
In a May 11 social media post, the Committee explained why Congress must pass the Financial Technology and Innovation for the 21st Century (FIT21) Act.
The US House Committee believes that the FIT21 Act will solve cryptocurrency regulation problems
This weekend, Cubans spoke out on social media concerns about how the SEC’s position against cryptocurrencies could influence 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 chairman, Gary Genslerthey were “trying to destroy the cryptocurrency industry.”
“The cryptocurrency industry wants a way to register and comply. He wants a way to keep out the speculative noise. Instead the SEC makes it so expensive, time-consuming and difficult for those who want to comply, that junk tokens are side by side with real companies and investors have no way of knowing what is junk and what is real,” Cuban added.
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In response, the U.S. House Finance Committee recognized Cuba’s concerns, noting that the SEC’s current approach hinders the industry’s ability to comply. So the The Committee is pushing the FIT21 law to fill these regulatory gaps.
The commission believes that the legislation would provide much-needed clarity and consumer protection. The law would also end SEC regulation through a coercive approach and allow the US digital asset ecosystem to thrive.
Furthermore, future legislation aims to clearly define the responsibilities of both Commodities Futures Trading Commission (CFTC) and the SEC. Under the proposed legislation, the CFTC will expand its oversight to include crypto-commodities, while the SEC’s regulatory domain will be clarified regarding 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 solidify America’s leadership of the global financial system for decades to come and strengthen our role as an international hub for innovation,” said House Financial Services Committee Chairman Patrick McHenry.
Notably, efforts to advance the FIT21 Act have continued since its approval by the committee in July 2023, with a push for a floor vote expected in the coming weeks. Interestingly, the bill has garnered support from key crypto stakeholders. Bitcoin ETF Issuer Grayscale said the bill “represents a welcome effort to achieve regulatory clarity for the crypto ecosystem.”
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Likewise, Matt Corva, general counsel at Consensys, said the regulation would help clear up regulatory messes created by federal agencies.
“Regulation may be timely to clean up the mess created by agencies outside their authority and the APA that 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 said he noted.
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