- The House Financial Services Committee advances H.R. 4763, the Financial Innovation and Technology for the 21st Century Act and H.R. 1747, the Blockchain Regulatory Certainty Act, marking the first instance of crypto-specific bills being advanced independently.
- There is resistance among lawmakers, with concerns over the increase in power to the Commodity Futures Trading Commission (CFTC) and potential weakening of consumer protections.
The House Financial Services Committee has made a pivotal move towards the adoption of cryptocurrency regulations by endorsing H.R. 4763, the Financial Innovation and Technology for the 21st Century Act and H.R. 1747, the Blockchain Regulatory Certainty Act. Despite lingering worries stemming from the FTX crypto exchange and a seemingly contentious relationship between cryptocurrency and existing regulations, the committee’s majority vote pushes both bills to the full House of Representatives for final judgment.
Unease Over Regulatory Shifts
However, not all committee members were in favor of the bills. An observable number of Democrats and Republicans voiced their dissent, primarily pointing towards a clause that grants more power to the Commodity Futures Trading Commission (CFTC). Critics fear that such a move could erode long-standing consumer protection provisions in the US securities laws, leaving investors more vulnerable to fraudulent activities.
Even amidst dissent, Rep. Patrick McHenry (R-N.C.), the committee’s chair, lauded the bills, acknowledging the necessity of specific legislation to ensure the US remains competitive in the evolving cryptocurrency market. Critics, however, remained focused on the bill’s provisions rather than the overall objective.
A notable critique came from Rep. Stephen Lynch (D-Mass.), who voiced strong disapproval, calling it the worst legislation presented for markup in his two decades in the committee. Democrats were primarily concerned about giving the CFTC increased authority over digital assets regulation without augmenting the agency’s funding, as the CFTC is known for its more lenient stance towards crypto companies compared to the Securities and Exchange Commission (SEC).
Republicans countered by pointing to a recent $120 million funding boost for the CFTC, approved by the Agriculture Committee, as sufficient to bolster the regulatory body’s resources. They urged for the bills’ advancement, highlighting the potential clarity it could bring to the burgeoning crypto industry, and underscored the possibility of the US missing out on crypto innovation if Congress fails to act.
In the meantime, the Senate has embedded anti-money laundering provisions for the crypto industry into a must-pass defense bill. The Crypto Council for Innovation’s head of government affairs, Brett Quick, commended the Senate’s efforts but stressed the continued need for regulatory clarity.