US Securities and Exchange Commission (SEC) chairman Gary Gensler has stated his opposition to the “Financial Innovation and Technology for the 21st Century Act”, also known as FIT21.
“It would destroy decades of work”
Gensler, who has long taken a stance against cryptocurrencies, said the bill, which is expected to be presented to the House of Representatives today, will create major gaps in the regulation of investment contracts:
“[FIT21] would create new regulatory gaps and undermine decades of precedent regarding the oversight of investment contracts, putting investors and capital markets at immeasurable risk,”
“Large part of crypto remains unregulated”
Stating that the fact that cryptocurrencies will be taken out of the investment contract status will take the SEC out of this order, Gensler stated that this situation will also endanger investors:
“FIT21 will allow crypto companies to characterize crypto investments as they wish, calling them digital commodities. With this special classification, these assets will be exempt from SEC supervision. The SEC’s moves to change them will also take time and place a significant financial burden on the agency. This will cause most of the crypto markets to remain unregulated.”
“$100 trillion markets would also be jeopardized”
Stating that the adoption of this bill will jeopardize not only the crypto world but also the capital markets worth $ 100 trillion, Gensler said:
“The self-certification risks investor protection not just in the crypto space; it could undermine the broader $100 trillion capital markets by providing a path for those trying to escape robust disclosures, prohibitions preventing the loss and theft of customer funds, enforcement by the SEC, and private rights of action for investors in the federal courts,”
“For crypto platforms, the definition of exchange disappears”
Stating that the bill would also prevent cryptocurrency platforms from being counted as exchanges, Historical rules such as the Howey test would cease to function, Gensler said, and this would put investors at serious risk.
What does FIT21 bring?
The bill, known as FIT21 and likely to be presented to the House of Representatives this evening, is supported by Republican Party lawmakers. This bill, which aims to take a broad look at the cryptocurrency ecosystem, aims to transfer most of the responsibility to the Commodity Futures Trading Commission (CFTC).
Last week, more than 60 organizations, including Gemini, Kraken, Coinbase and DCG, signed a letter expressing their support for the bill.
According to US media outlet Forbes, the bill is also supported by Donald Trump, who has re-announced his presidential candidacy in the elections.
As it will be remembered, a bill known as SAB 121, which canceled a regulation published by the SEC in March 2022, was also passed in the House of Representatives.
In the statement made by the White House, it was stated that this approval could pose serious dangers and that Biden did not intend to sign the final signature required for enactment.