In a tweet on July 13, Justin Slaughter, policy director at research firm Paradigm and former senior adviser to the SEC, offered his thoughts on the future of the Lummis-Gillibrand Responsible Financial Innovation Act bill.
He stated, “This bill is less likely to pass than McHenry-Thompson for one simple reason: neither Lummis nor Gillibrand heads a Senate committee.”, indicating that the bill may not pass the U.S. Congress due to the lack of committee leadership from the sponsors. .
The bill sponsored by Senators Cynthia Lummis and Kirsten Gillibrand aims to provide regulatory clarity for the emerging crypto industry. It grants the Commodity Futures Trading Commission (CFTC) oversight functions over crypto exchanges.
The bill did not receive much support at its inaugural launch last year and was relaunched on July 12.
Why the bill might fail.
Slaughter explained that any bill in Congress needs the support of the Speaker and senior members on each committee to determine whether it will pass the initial stages.
According to Slaughter, the Lummis-Gillibrand bill is meeting significant opposition, as Senate Judiciary Committee chair Senator Sherrod Brown previously expressed apathy for it. In addition, other Democrats on the banking committee were not particularly enthusiastic about the matter.
The former SEC senior adviser noted that even if the bill gets enough support to pass the committee, it may never get a hearing in the Senate because of Senator Brown’s opposition. Committee chairs can kill any bill they don’t support by not bringing it up on the congressional floor.
Lummis-Gillibrand’s bill may still shape crypto law.
According to Slaughter, the Lummis-Gillibrand Act could still affect crypto law. Key aspects of the bill could be included in another legislative proposal known as the McHenry-Thompson Bill.
The McHenry-Thompson bill, proposed by senior members of the House Financial Services Committee, aims to clarify the role of the SEC and CFTC in regulating the cryptocurrency industry.
Slaughter noted that the McHenry-Thompson Bill was enacted for Markup later this month, and Congressmen can add as many amendments as they can.
Meanwhile, Slaughter identified about ten parts of the Lummis-Gillibrand Act that should be added to the McHenry-Thompson Act, including the definition of smart contracts, mandatory proof of reserves, CEO attestation, CFTC funding, criminal penalties for felonies with crypto assets, and others.
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