SEC President opposes FIT21, but White House does not veto

SEC Chairman Gary Gensler raises concerns about the FIT21 Act, highlighting potential regulatory gaps and risks for investors and markets. While the Biden administration opposes approval of the bill, the White House does not plan to veto it, showing a divergence in the US government over the regulation of cryptocurrencies in the United States.

The FIT21 Act is scheduled for a vote in the U.S. House of Representatives today, May 22. Gensler argues that the bill could weaken consumer protections and allow companies to escape SEC oversight by self-declaring crypto products as decentralized.

“The SEC would only have 60 days to review and challenge the certification that a product is a digital good. Those that the SEC successfully challenges would be reclassified as restricted digital assets and subject to the SEC’s lighter oversight regime, which excludes many essential protections.” Gary Gensler.

Despite Gensler’s opposition, FIT21 has strong support from Congress and the crypto community. Companies like Coinbase, Kraken, and Gemini, along with advocacy groups like Stand With Crypto and the Crypto Council for Innovation, are urging lawmakers to support the legislation.

Congressman French Hill, Chairman of the Subcommittee on Digital Assets, Financial Technology and Inclusion, defends the bill, saying it would provide adequate securities to protect investors. Meanwhile, the White House indicates that it will not attempt to veto FIT21 if approved, even if it opposes the project, showing a possible compromise regarding the regulation of cryptocurrencies.

FIT21 defines competencies between the SEC and CFTC for cryptoassets, clearly delineating their jurisdictions. It seeks to resolve regulatory controversies, offer guidance to developers and establish standards for company registrations and operations in the sector. Presented in 2023 by members of Congress, the project aims to bring greater clarity and security to the cryptocurrency market.

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The views and opinions expressed by the author, or anyone mentioned in this article, are for informational purposes only and do not constitute financial, investment or other advice. Investing or trading cryptocurrencies carries a risk of financial loss.