Top line
The House passed legislation Wednesday night that would give oversight authority over most forms of cryptocurrency to a more industry-friendly agency — potentially putting President Joe Biden in the difficult position of deciding whether to go against his own SEC chairman and veto as former president to refuse. Donald Trump is courting the industry in his 2024 presidential campaign.
The White House said Wednesday that it “opposes” the legislation, but stopped short of saying president … [+]
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Key facts
The House voted 279-136 to pass the “Financial Innovation and Technology for the 21st Century Act,” with 71 Democrats and 208 Republicans voting in favor of the legislation.
The legislation would place most forms of cryptocurrency, including bitcoin, under the regulatory purview of the Commodity Futures Trading Commission by classifying them as commodities, rather than securities that would fall under the authority of the Securities and Exchange Commission, which would be a crackdown performed on the industry under Biden.
Lawmakers who supported the bill touted it as a way to clarify regulatory authority for digital assets, with Digital Assets Subcommittee Chairman Rep. French Hill, R-Ark., who called it perhaps “the most substantial piece of digital asset legislation in Congressional history.” he previously told Forbes, noting that Trump supports the bill.
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Chief Critic
The SEC’s crypto crackdown, which includes a series of charges against companies and individuals it accuses of violating federal regulations, has become a new line of attack for Trump against Biden as the former president takes crypto supporters to court and they told him during a Mar-A-Lago dinner earlier this month that they “vote better” for him, reports Politico. SEC Chairman Gary Gensler opposed the House legislation, arguing on Wednesday it would allow crypto issuers to “self-certify” that they are issuing crypto as a commodity rather than a security, giving the SEC a limited 60-day window to review the classification.
Important quote
“The self-certification process envisioned by the bill puts investor protections at risk not only in the crypto space; it could undermine the broader $100 trillion capital markets by providing a path for those seeking to escape robust disclosures, prohibitions preventing the loss and theft of client funds, enforcement by the SEC, and private rights of action for investors in federal courts,” Gensler said Wednesday said.
Tangent
Trump’s campaign began accepting crypto donations on Tuesday, encouraging his supporters to make the announcement to “build a crypto army.”
What we don’t know
Whether the Democratic-controlled Senate will pass the legislation. Eight House Democrats who supported the bill urged their Senate colleagues to support it in a memo on Tuesday, CoinDesk reported. In a possible blow to the House bill, 11 Senate Democrats, including Majority Leader Chuck Schumer, D-N.Y., voted with Republicans earlier this month to roll back crypto SEC regulations, splitting with Biden, who said said he would veto the bill, which also passed the House with bipartisan support.
Key background
Trump embraced crypto after criticizing the industry during his time as president, tweeting in 2019 that he was “not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and on thin air based.” He has since launched a series of NFT “trading cards” featuring his likeness, and his $7 billion net worth consists of about $3 million in digital assets, according to a March Forbes estimate. The Biden administration, meanwhile, has taken a measured approach to crypto, acknowledging its explosive growth and the need for the US to “maintain technological leadership in this rapidly growing space,” while also warning that it has “significant implications for consumer protection, financial stability, national security and climate risk,” the White House wrote in a 2022 executive order.
Further reading
House to Vote on Who Will Regulate Crypto (Forbes)
Trump Campaign Now Accepting Crypto Donations (Forbes)
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