The U.S. House of Representatives passed the Financial Innovation and Technology for the 21st Century Act (FIT21) on May 22.
A total of 279 representatives voted yes, 136 voted no and 15 abstained on the proposed crypto legislation.
The bill received bipartisan support, but received mostly Republican votes, with 208 of 217 Republican representatives voting yes. In contrast, 71 of the 213 Democratic representatives voted in favor of the bill.
Despite minority Democratic support, the bipartisan endorsement within the crypto sector has received widespread praise. 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. The Senate must vote on FIT21 at a later date.
Bill could help crypto flourish
Chairman Patrick McHenry called the vote a “historic step” and asserted that the bill provides “regulatory clarity and robust consumer protections” to help the U.S. 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, provide a clear path for issuers to raise funds and clarify the relevant regimes for each issuer.
FIT21 also aims to ensure that exchanges, brokers and dealers provide information, segregate customer funds from corporate funds and meet other requirements.
Opposition has arisen
Despite majority support from both parties, some lawmakers and regulators have spoken out against FIT21.
Democratic Rep. Maxine Waters argued that the bill will allow crypto companies to avoid responsibility after they “illegally made billions of dollars from issuing or facilitating the purchase and sale of crypto securities.”
Meanwhile, SEC Chairman Gary Gensler publicly opposed FIT21 before the vote, saying the proposed legislation undermines the agency’s existing powers over investment contracts and securities.
The White House has stated its opposition to the bill, but currently has no plans to veto it if it passes the Senate.