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US House Passes Crypto Bill Despite SEC Warning of ‘Immeasurable Risk’
The US House of Representatives passed a landmark bill on Wednesday that aims to establish a new regulatory framework for digital assets, setting the stage for a potential showdown with the Securities and Exchange Commission (SEC).
The “Financial Innovation and Technology for the 21st Century Act,” passed with bipartisan support by a vote of 279-136, seeks to clarify the legal status of cryptocurrencies and promote growth in the industry. However, the bill faces an uncertain future in the Senate and has drawn sharp criticism from SEC Chairman Gary Gensler, who warned that it could expose investors to “immeasurable risk.”
Supporters of the bill, mostly Republicans, argue that existing regulations are outdated and hinder innovation in the burgeoning cryptocurrency industry. They argue that the legislation would provide much-needed clarity and attract investment.
The House vote comes at a crucial time for the cryptocurrency industry, as the SEC appears poised to approve applications for spot ether exchange-traded funds (ETFs), a move that has bolstered market sentiment.
However, in an unusual rebuke, Gensler released a statement expressing deep concern about the bill’s potential consequences. He argued that this would “create new regulatory loopholes” by exempting some cryptocurrency investment contracts from securities laws, leaving investors vulnerable to fraud and manipulation.
Gensler, who has taken a tough stance on the cryptocurrency industry during his tenure, reiterated his belief that digital assets should be subject to the same rules and investor protections as traditional financial instruments. He criticized the bill that allows cryptocurrency issuers to self-certify their products as commodities, potentially bypassing SEC oversight.
The bill’s passage highlights the ongoing tension between cryptocurrency advocates and regulators grappling with new challenges posed by digital assets. It remains to be seen whether the Senate will accept the bill and whether the SEC will launch a legal challenge.
Shardeum co-founder Nischal Shetty commented: “The FIT21 Act is a huge win for the Web3 ecosystem. By offering regulatory clarity and fostering innovation, this legislation has the potential to drive broader adoption of cryptocurrencies and expand the Web3 landscape. The US is taking a crucial step towards integrating crypto assets with traditional markets, a move India should carefully consider.”
“To build on this momentum, it is critical to focus on growing the Web3 ecosystem in India. This includes educating young people about Web3, increasing the number of developers working on Web3 products, and creating more career opportunities in this space. Developing consumer dApps tailored for the Indian market will be essential. With the clarity and support provided by initiatives like FIT21, we can expect a significant increase in adoption, which will naturally lead to improved tax laws and regulatory frameworks,” he added. .