The U.S. House of Representatives passed a bill on Wednesday to establish a new legal framework for digital currencies. The vote, which fell along party lines with bipartisan support (279-136), comes despite strong warnings from the Securities and Exchange Commission (SEC) about potential financial risks.
The bill, titled “The Financial Innovation and Technology for the 21st Century Act,” is hailed by crypto advocates as a game-changer. Congressman Steve Watkins, a vocal bill supporter, stated, “This is a huge win for innovation and economic growth. It provides the clarity and certainty the crypto industry needs to thrive.”
However, the SEC Chair Gary Gensler issued a scathing statement, arguing that the bill “would create new regulatory gaps and undermine decades of precedent regarding investment contracts, putting investors and capital markets at immeasurable risk.” Gensler elaborated, “We’ve seen high-profile scams, fraud cases, bankruptcies, and failures in this space. This bill would remove essential safeguards for everyday investors.”
The core of the disagreement lies in how the bill classifies certain crypto assets. The bill would remove them from SEC oversight by excluding specific investment contracts recorded on a blockchain from being considered securities. This is a significant point of contention for Gensler, who believes cryptocurrencies should be subject to the same investor protections as other financial instruments.
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