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US House Passes Crypto Bill Despite SEC Warning

US House Passes Crypto Bill Despite SEC Warning

NEWS

In a move that defies a cautionary note from the U.S. securities regulator, the US House of Representatives approved a bill on Wednesday aimed at establishing a new legal framework for digital currencies.

The Financial Innovation and Technology for the 21st Century Act, sponsored by Republicans, garnered bipartisan support with a 279-136 vote. Whether the Senate will consider the measure remains uncertain.

Proponents of the bill in Congress assert that it will offer regulatory clarity and foster the growth of the digital currency industry.

The House’s decision comes amid signals from the U.S. Securities and Exchange Commission (SEC) indicating a likely approval of applications for spot ether exchange-trade funds, marking an unexpected boon for the industry.

However, SEC Chair Gary Gensler cautioned in a statement that the bill “would create new regulatory gaps and undermine decades of precedent regarding the oversight of investment contracts, putting investors and capital markets at immeasurable risk.”

While the bill found support among crypto advocates and industry bodies, who have criticized Gensler’s SEC as a barrier to broader digital asset adoption, Gensler has consistently argued that cryptocurrencies should be subjected to the same regulatory standards as traditional assets.

In his statement on Wednesday, Gensler highlighted concerns that, under the bill, investment contracts recorded on a blockchain would no longer be categorized as securities, thereby depriving investors of protections afforded by securities laws.

Among other objections, Gensler noted that the bill would enable issuers of crypto investment contracts to self-certify their products as digital commodities exempt from SEC oversight, with the agency granted only a 60-day window to contest such certifications.

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