Former Treasury Official Criticizes FIT 21 Ahead of House Vote
The Financial Innovation and Technology for the 21st Century Act (FIT 21), which aims to legalize the digital asset industry, has been criticized by a former Treasury official, Graham Steele, as the House of Representatives prepares to vote.
Described as a lightweight regulatory framework for cryptocurrencies, the bill does not address Big Tech, contrary to some claims.
FIT 21 Criticized Ahead of House Vote
The FIT 21 Act has sparked much debate among members of the U.S. House of Representatives and other stakeholders as the House prepares for a key vote. Former Treasury official Graham Steele, who is said to be following the position of FDIC Chairman, criticized the bill’s approach to regulating digital assets.
Steele suggests that legislation may not effectively address issues related to today’s financial technologies. But some supporters of the bill not only misrepresented it as an anti-Big Tech bill, but also neglected to include any specific provisions in the bill that would directly regulate these companies.
Many digital asset organizations, such as Coinbase and Kraken, have endorsed the bill as a way to ensure an open legal environment. It aims to determine what should be considered digital assets and expand the Commodity Futures Trading Commission’s (CFTC) authority to cover these assets.
But some top Democrats, such as House Financial Services Committee Ranking Member Maxine Waters and House Agriculture Committee Ranking Member David Scott, opposed the idea. They pointed out that the bill threatens established jurisprudence and could introduce a certain level of instability in the traditional securities market.
Concerns About Investor Protection and Overreach
Criticisms of FIT 21 are not only legal but also related to the protection of investors and the stability of financial markets. An internal email from the Democratic Whip’s office leaked to Politico highlighted concern that safe harbor provisions could allow companies to evade standard securities law requirements, resulting in fraud and market manipulation.
This aspect of the legislation led the legislature to hold a briefing with the Securities and Exchange Commission (SEC) to further consider the implications.
Additionally, the legislation has been criticized for potentially preventing shareholders from taking legal action against publicly traded entities and for anticipating state legislation on digital assets. Such measures could dilute standards of trust and erode the foundations of capital markets, according to information provided by the Democratic Whip’s office.
Market Reactions and Political Dynamics
The FIT21 controversy raises a broader political debate about cryptocurrencies and digital assets in the United States economy. For example, Mike Novogratz, CEO of Galaxy Investment Partners, pointed out that Democrats’ stance on the bill could be a big mistake.
He says regulating cryptocurrencies should not be a partisan political agenda and should not be politicized. These statements appear to be a growing trend towards the adoption of crypto technologies in the industry, regardless of the political party involved.
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Kelvin is a distinguished author specializing in crypto and finance, with a bachelor’s degree in Actuarial Science. Known for her sharp analysis and insightful content, she is fluent in English and specializes in comprehensive research and on-time delivery.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. Neither the author nor the publication accepts any liability for your personal financial loss.
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