Democratic Leaders Won’t Whip FIT21 Despite Opposition: Report

California Democratic Congresswoman Maxine Waters(D-CA) and David Scott(D-GA) have said that they will not be calling on Democrats to vote against the Financial Innovation and Technology for the 21st Century Act (FIT21) prior to Wednesday’s expected vote.

Also Read: Elizabeth Warren’s Crypto Bill Draws Interest Amid Checkered Legislative History

This decision was revealed through an email from the Democratic Whip’s office that was procured by Politico on Monday. Despite their strong opposition to the crypto regulatory framework, Waters and Scott have chosen not to whip party members against it.

Support and Criticism Emerge for FIT21’s Regulatory Impact

Several stakeholders in the crypto space have supported FIT21, which is officially known as H. R. 4767. This bill is expected to provide much-needed clarity for the digital asset industry in terms of regulatory expectations by expanding the CFTC’s jurisdiction over cryptocurrencies. 

NEW: House Democratic leaders said today they will NOT whip against House Republicans' crypto bill, I'm told.

The whip question sent to members this a.m. says that Waters and Scott "strongly oppose" the legislation, but does not urge them to vote "no": https://t.co/V3DSjewYzV pic.twitter.com/lORrUIo4RZ

— Eleanor Mueller (@Eleanor_Mueller) May 20, 2024

However, some critics have argued that the bill may also erode the existing measures that seek to prevent volatility in the cryptocurrency market. 

Also Read: House Democrats Take a Voting Stance on 2 Pro-Crypto Bills

The email from the Democratic Whip’s office highlighted concerns that the bill could disrupt decades of legal precedent and create uncertainty in traditional securities markets.

Also, the bill contains provisions that permit entities to file ‘intent to register’ if certain criteria are met, which, in essence, effectively shields them from SEC rules and regulations until the SEC and CFTC finalize their rules.

Critics argue that this provision may actually reduce investor protections and allow for fraud and manipulation of markets.

SEC’s Enforcement Approach Sparks Debate

The American Securities and Exchange Commission (SEC) has been accused of using enforcement as a method of regulating cryptocurrencies. 

In recent years the SEC has provided several enforcement actions against industry players. This has provoked some economic concerns that it may be driving crypto businesses overseas and stifling innovation.

Blockchain Association Requests FIT21 Vote

Cryptopolitan reported earlier that Blockchain Association penned a letter to Speaker of the House Mike Johnson(R-LA) and House Minority Leader Hakeem Jeffries(D-NY), requesting a FIT21 House floor vote. 

The association explained that the bill would help U. S. operators understand the regulatory environment. Also, the Blockchain Association has urged for a pro-innovation and pro-consumer framework to protect the American marketplace and maintain U.S. supremacy in the crypto sphere.

The letter reads: “This lack of clarity impedes innovation and hamstrings companies, harming America’s standing in the global technology race. We are seeking pro-innovation and pro-consumer guardrails to ensure a fair and safe marketplace and to safeguard U.S. technological leadership in this cutting-edge space.”

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Cryptopolitan Reporting by Lawrence Damilola

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