The US House of Representatives passed the Financial Innovation and Technology for the 21st Century Act (FIT21) on May 22.
In all, 279 representatives voted yes, 136 voted no, and 15 abstained from voting on the proposed crypto legislation.
The bill received bipartisan support but mainly received Republican votes, with 208 of 217 Republican representatives voting yes. By contrast, 71 of 213 Democratic representatives voted in favor of the bill.
Despite minority Democratic support, the bipartisan approval has attracted praise within the crypto sector. Crypto exchange Coinbase noted “strong bipartisan support,” while CLO Paul Grewal called the 71 Democratic votes “real progress” against the refusal to legislate.
The bill is not yet law. Senate must vote on FIT21 at a later date.
Bill could help crypto thrive
Chairman Patrick McHenry called the vote a “historic step,” asserting the bill provides “regulatory clarity and robust consumer protections” to help the US crypto ecosystem thrive.
The proposed legislation aims to clearly define how the SEC and CFTC can regulate crypto as securities and commodities by creating registration regimes for each.
The bill also aims to ensure that crypto issuers provide disclosures and information, offer issuers a clear path to raising funds, and clarify the relevant regimes for each issuer.
FIT21 also aims to ensure that exchanges, brokers, and dealers provide disclosures, segregate customer funds from corporate funds, and meet other requirements.
Opposition has emerged
Despite majority bipartisan support, some lawmakers and regulators have spoken out against FIT21.
Democratic Representative Maxine Waters argued that the bill will allow crypto companies to escape responsibility after making “billions of dollars unlawfully issuing or facilitating the buying and selling of crypto securities.”
Meanwhile, SEC chair Gary Gensler publicly opposed FIT21 before the vote, stating the proposed legislation undermines the agency’s existing powers over investment contracts and securities.
The White House has stated that it opposes the bill but does not currently intend to veto it if it passes through the Senate floor.