U.S. House Committees Introduce Act to Regulate Cryptocurrency Industry Amidst SEC Crackdowns

Updated: 21 July 2023

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The U.S. House Committees on Agriculture and Financial Services unveiled a digital assets bill on July 20, aiming to create a regulatory framework for the cryptocurrency industry amidst increasing SEC crackdowns and calls for regulations.

The bill was introduced by Glenn “GT” Thompson, French Hill, and Dusty Johnson, respective chairmen of the House committees involved.

Chairman Thompson: The New Crypto Bill Marks a Significant Milestone

The new crypto bill, named the Financial Innovation and Technology for the 21st Century Act, was introduced by Glenn Thompson, Chairman of the House Committee, aiming to establish a crucial regulatory framework that addresses long-felt needs in the industry.

“Today’s introduction of the Financial Innovation and Technology for the 21st Century Act marks a significant milestone in the House Committees on Agriculture and Financial Services’ efforts to establish a much-needed regulatory framework that protects consumers and investors and fosters American leadership in the digital asset space,” said Chairman Thompson.

Bill Gives CFTC and SEC Seats at the Table

The crypto space has long needed a regulatory system, but it remains uncertain and lacking proper framework and authority, leading to unease among crypto companies and investors.

Only a few countries have drafted bills, including the recently enforced UK’s Financial Services and Markets Act 2023, and now the US has introduced a bill to streamline the digital assets industry.

Johnson said, “The crypto industry wants clarity and our collaborative bill gives both the CFTC and SEC a seat at the table. Our bill establishes clear principles to ensure financial security and certainty as digital asset developers continue to innovate”.

Blockchain is Any Technology Composed of Source Code That is Publicly Available

The proposed bill defines blockchain as a technology that creates a public ledger of verified transactions shared among network participants using cryptography and distributed across the network.

It defines digital assets as fungible digital representations of value transferable without a central authority and recorded via blockchain networks, excluding traditional securities like notes, stock, bonds, and other related assets.

The Bill May Give SEC Greater Powers

Delphi Labs’ General Counsel, Gabriel Shapiro, tweeted that excluding traditional securities from the definition of digital assets grants more power to the SEC for enforcing aggressive measures.

https://twitter.com/lex_node/status/1682148880555679744?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1682150052364468226%7Ctwgr%5Ef077491f331a85c52f0fbef5d41391d417753ec0%7Ctwcon%5Es2_&ref_url=https%3A%2F%2Ffinance.yahoo.com%2Fnews%2Fu-house-republicans-introduce-crypto-215511651.html

“The SEC can still go on the warpath..all they have to do is argue that a token is a “transferable share” “a profit interest’” etc.”, Shapiro wrote on Twitter.

The proposed bill would broaden digital regulation to include various assets like “Liquid Staking Tokens” and cTokens, which currently have lesser regulation.

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