California Democratic Congresswoman Maxine Waters (D-CA) and David Scott (D-GA) have announced that they will not be urging Democrats to vote against the Financial Innovation and Technology for the 21st Century Act (FIT21) ahead of the expected vote on Wednesday.
According to an email obtained by Politico on Monday, this decision was made by the Democratic Whip’s office. Despite their strong opposition to the crypto regulatory framework, Waters and Scott have chosen not to rally party members against it.
FIT21, officially known as H.R. 4767, has received support from several stakeholders in the crypto space. The bill is expected to bring much-needed clarity to the digital asset industry by expanding the jurisdiction of the Commodity Futures Trading Commission (CFTC) over cryptocurrencies.
However, some critics argue that the bill could undermine existing measures aimed at preventing volatility in the cryptocurrency market.
The email from the Democratic Whip’s office highlighted concerns that the bill could disrupt long-established legal precedents and create uncertainty in traditional securities markets. Additionally, the bill includes provisions that allow entities to file an “intent to register” if certain criteria are met, effectively shielding them from Securities and Exchange Commission (SEC) rules and regulations until the SEC and CFTC finalize their own rules.
Critics argue that this provision may reduce investor protections and open the door to fraud and market manipulation.
The SEC has faced criticism for using enforcement actions as a means of regulating cryptocurrencies. This approach has raised concerns that it is driving crypto businesses out of the country and stifling innovation.
Earlier, the Blockchain Association wrote a letter to Speaker of the House Mike Johnson (R-LA) and House Minority Leader Hakeem Jeffries (D-NY), requesting a FIT21 vote on the House floor. The association believes that the bill will help U.S. operators understand the regulatory environment and has called for a framework that supports innovation and protects consumers, in order to maintain America’s dominance in the crypto sphere.
In their letter, the Blockchain Association emphasized the need for clarity to foster innovation and ensure a fair and secure marketplace, thereby safeguarding America’s technological leadership in this cutting-edge space.
Reported by Lawrence Damilola for Cryptopolitan.