Several U.S. House Democrats Petition Colleagues to Join Yes Side on Crypto Bill

As a researcher with a background in finance and technology, I’m closely following the developments surrounding the U.S. House of Representatives’ upcoming vote on the Financial Innovation and Technology for the 21st Century Act (FIT21), which aims to establish regulations over the crypto markets. The bipartisan support for this legislation is a significant step forward for the industry, but its future in the Senate remains uncertain.

The United States House of Representatives is poised to hold a vote on a significant, bipartisan-backed cryptocurrency bill during its Wednesday session. This legislative move, which is broadly anticipated to pass, represents a landmark achievement for the crypto sector. Notably, several Democrats within the House are urging their colleagues to support this proposal.

At least eight Democratic representatives in the House have publicly expressed their support for the Financial Innovation and Technology for the 21st Century Act (FIT21). There could be additional backing as suggested in a memo obtained by CoinDesk from a congressional source. The bill is slated for debate and a vote on its merits later today, Wednesday.

“Democrat lawmakers believe it’s essential for us to regulate the digital asset markets at this point,” they wrote in the memo on Tuesday. “This isn’t a matter of party lines, but rather a shared responsibility.” Among those signing were Reps. Wiley Nickel (D-N.C.), Yadira Caraveo (D-Colo.), Jim Himes (D-Conn.), Jasmine Crockett (D-Tex.), Ritchie Torres (D-N.Y.), Darren Soto (D-Fla.), Josh Gottheimer (D-N.J.) and Don Davis (D-N.C.).

As a crypto investor, I’ve been closely following the developments in the House regarding the crypto market-structure legislation. The progress made in the House is certainly promising, yet it underscores the challenge we face in getting similar traction in the Senate. The lack of significant movement there raises concerns that the bill may not materialize as planned. However, senior staff from the Financial Services and Agriculture committees working on the bill have disclosed that they’ve been holding more frequent talks with their counterparts in the Senate. They’re also keeping an open mind about potential legislative vehicles for attaching the bill to, as we approach the end of this congressional session.

As a crypto investor, I can relate to Rep. McHenry’s desire for a significant vote count this week in the House to demonstrate momentum. I’ve made my investments based on similar signs of progress and support. It’s disheartening that this process, which was supposed to begin nearly a year ago, has been delayed until May, an election year no less. We can only hope that our collective efforts will finally bear fruit and move forward with the necessary momentum.

He acknowledged that his legislative colleagues are now cognizant of the crypto voting community’s presence. This recognition bodes well for our ongoing initiatives.

The FIT21 bill proposes setting up a definitive structure for managing digital assets in the United States. This involves identifying the regulatory jurisdiction for each token and cryptocurrency exchange. The act ensures consumer safeguards, disclosures, and tackles the application of cryptocurrencies in illicit activities. With this vote, crypto legislation of such extensive scope has advanced to a conclusive stage in either house of Congress for the first time.

Democratic advocates put forth strong arguments for regulatory intervention in the cryptocurrency markets, where major businesses are engaged in intense legal disputes with the Securities and Exchange Commission (SEC) over the extent of its jurisdiction. Lawmakers emphasized that the U.S. risks falling behind other countries that have already established regulations for this industry.

Approximately one fifth of the American population has engaged with cryptocurrency in some way, indicating its enduring presence. Simultaneously, legislation to oversee the integration of this emerging form of digital technology into our society responsibly remains absent from Capitol Hill.

As a researcher, I’ve noticed that The House’s digital assets legislation hasn’t encountered any veto threats from the White House at present. In contrast, there was a significant bipartisan vote in the Senate to pass a resolution aimed at overturning SEC’s Staff Accounting Bulletin No. 121 (SAB 121) on crypto accounts.

As a crypto investor following the latest political developments, I can tell you that according to Republican sources, some of the Democrats who previously voted against overturning SAB 121 in the House might consider supporting this new bill as well.

FIT21 has previously cleared its two relevant House committees with some Democratic support.

The ranking members of the House Financial Services and Agriculture Committees, Maxine Waters (D-Calif.) and David Scott (D-Ga), respectively, expressed their continued opposition to the ongoing effort in an email to their Democratic colleagues. However, they have no plans to mobilize any voting against it.

Consumer advocacy groups like Americans for Financial Reform voiced opposition to the bill, asserting that it fell short in safeguarding consumer interests and employed a flexible definition of decentralization that could be easily exploited when determining regulatory measures.

As a crypto investor, I’ve noticed the uncertainty surrounding the regulatory landscape in the US has been pushing businesses away from our shores. Rep. Glenn “G.T.” Thompson, the Agriculture Committee chairman, echoed my concerns and emphasized the urgency of passing legislation to address this issue.

As a crypto investor, I can tell you that currently, many of us are holding our digital assets outside of the country due to a lack of clear regulatory framework. Instead, we’re relying on inconsistent enforcement as our only form of regulation.

As a crypto investor keeping an eye on regulatory developments, I’m excited about the progress being made in the Senate regarding the proposed legislation from Sens. Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.). These two senators have introduced a bill that comes closest to addressing the issues related to Financial Innovation Technologies 21 (FIT21), a significant piece of legislation for our industry.

Rashan Colbert, the policy chief at dYdX Trading and a previous aide to Senator Cory Booker (D-N.J), pointed out that the legislation has been under consideration in the House for nineteen months.

He remarked that for the Senate to thoroughly examine this bill, the committee process must be initiated first. Regrettably, given the current Congress, it seems unlikely that the Senate will take up this matter.

One important aspect to address is enhancing the Commodity Futures Trading Commission’s (CFTC) funding, as this agency plays a crucial role in regulating crypto spot markets. However, its budget is significantly smaller than that of its counterpart, resulting in a limited capacity for enforcing regulations effectively.

Nikhilesh De contributed reporting.

UPDATE (May 21, 2024, 19:48 UTC): Adds comment from Americans for Financial Reform.