REGULATION

Community Celebrates as Crypto Bill Passes Initial Review: Securities Definition Clarified, SEC Oversight Restricted

share
Community Celebrates as Crypto Bill Passes Initial Review: Securities Definition Clarified, SEC Oversight Restricted

The House Financial Services Committee passed six pieces of legislation in a bipartisan vote of 35-15, with the crypto bill aiming to provide clearer definitions of cryptocurrencies as securities or commodities, expand the CFTC's authority, and clarify the SEC's regulatory scope. While the bills still face hurdles in the Senate and significant challenges, the crypto community widely views this as a historic victory.

House Financial Services Committee Approves Six Bills

According to an announcement by the House Financial Services Committee, the six bills include:

Financial Innovation and Technology for the 21st Century Act

The "Financial Innovation and Technology for the 21st Century Act" was introduced by Republican Congressman French Hill. It slightly restricts the SEC's regulatory authority and grants the CFTC broader powers over crypto trading.

For example, crypto projects must register with the SEC and CFTC within a deadline. The SEC will have six months to determine if the project is decentralized enough to be classified as a commodity, then it will be overseen by the CFTC.

Blockchain Regulatory Certainty Act

The "Blockchain Regulatory Certainty Act" was introduced by Republican Congressman Tom Emmer.

The bill clarifies that "non-custodial blockchain developers and service providers" such as miners, node validators, wallet service providers, are not required to register as Money Transmitters with financial regulators.

He tweeted that this is a significant victory for the United States.

Financial Technology Protection Act of 2023

The "Financial Technology Protection Act of 2023" was proposed by Republican Congressman Zach Nunn.

It will establish an independent financial technology task force under the Treasury Department to combat terrorism and illicit financing, while encouraging cooperation between the public and private sectors to address financial crime issues in the digital asset ecosystem.

No Russian Agriculture Act

The "No Russian Agriculture Act" was introduced by Democratic Congresswoman Maxine Waters.

It urges Americans serving in senior positions at international financial institutions to encourage investments in projects that do not rely on Russian agricultural products through advocacy, voting rights, and influence.

Exposing China’s Support for the Taliban Act

The "Exposing China’s Support for the Taliban Act" was introduced by Democratic Congressman Stephen Lynch.

The bill aims to allocate funds for research to disclose China's entities involved in illegal financial networks with Afghanistan and the Taliban to Congress.

Stop Fentanyl Money Laundering Act of 2023

The "Stop Fentanyl Money Laundering Act of 2023" was proposed by Republican Congressman Blaine Luetkemeyer.

It aims to prevent money laundering activities related to fentanyl and narcotics.

Democrats Criticize: Crypto Wishlist

Maxine Waters, a Democrat and former chair of the House Financial Services Committee, criticized the "Financial Innovation and Technology for the 21st Century Act" as a major wish list for the crypto sector and called on members to oppose it.

Democratic Congressman Stephen Lynch also stated that this is the worst bill he has seen in 20 years.

However, six Democratic lawmakers still supported the bill:

  • Jim Himes

  • Wiley Nickel

  • Ritchie Torres

  • Steven Horsford

  • Josh Gottheimer

  • Brittany Pettersen

Formal Legislation Premature

Justin Slaughter, Policy Director at Paradigm, tweeted that the six Democratic lawmakers supporting the bills have an average age of 46, while the rest of the lawmakers have an average age of 61, suggesting that most lawmakers are too old to keep up with current trends.

The general reaction from the crypto community, as expressed by Jake Chervinsky, General Counsel at the Blockchain Association, is that this is a historic victory for crypto regulation.

Although the bills have received initial support from the House Financial Services Committee, they still need to be reviewed and voted on by the Senate. With Democrats holding a slight majority over Republicans in the Senate, it may be premature to celebrate at this point.