The House Financial Services Committee advanced two crypto bills after a landmark markup on Wednesday. Despite some criticism from lawmakers, a majority of the committee voted in favor of the Financial Innovation and Technology for the 21st Century Act (H.R. 4763) and the Blockchain Regulatory Certainty Act (H.R. 1747). Chair of the committee, Rep. Patrick McHenry (R-N.C.), praised the legislation, saying it was the first time a committee was marking up crypto-specific legislation and that it was necessary to prevent the U.S. from “falling behind” other countries in regulating crypto. “Our comprehensive digital asset market structure legislation recognizes a key issue: digital assets that are not inherently securities may be offered as part of an investment contract but that does not make them securities,” he said.
However, some committee members expressed concerns about the bill weakening consumer protections and leaving U.S. investors with fewer protections against fraud. Rep. Stephen Lynch (D-Mass.) said it was the “worst piece of legislation” he had seen in his 20 years on the committee. Democrats also took issue with the bill granting the Commodity Futures Trading Commission (CFTC) more authority to regulate the digital assets space without increasing the agency’s funding.
Republicans argued that an additional $120 million in funding recently approved by the Agriculture Committee would vest the CFTC with the resources to do its job more thoroughly. They also said the legislation would temper the Securities and Exchange Commission’s (SEC) crackdown on the digital assets industry, incentivizing companies to remain in the U.S. rather than migrate to more crypto-friendly jurisdictions. “If Congress does nothing, the United States will miss a huge opportunity and Americans will suffer for it,” said Rep. Tom Emmer (R-Minn.), who is also the majority whip.
The House Agriculture Committee will start its own markup of the Financial Innovation and Technology for the 21st Century Act on Thursday, while the Financial Services Committee marks up stablecoin legislation. Meanwhile, the Senate added anti-money laundering provisions for the crypto industry to a must-pass defense bill.
Brett Quick, the head of government affairs at the Crypto Council for Innovation, said the industry organization “appreciates the efforts of policymakers to tackle the important questions surrounding crypto and [Bank Secrecy Act]/AML compliance.”