U.S. House Republicans on Thursday introduced a new digital asset oversight bill that aims to establish a regulatory framework to protect investors in the crypto industry.
"Today's introduction of the Financial Innovation and Technology Act for the 21st Century marks an important milestone in the efforts of the House Agriculture and Financial Services Committees to establish a much-needed regulatory framework that protects consumers and investors and promotes American leadership in the digital asset space," House Agriculture Committee Chairman Glenn "GT" Thompson (R-Pa.) said in a statement.
The bill, one of several introduced in recent years that seek to create comprehensive rules for digital assets, comes at a time when a perceived lack of regulatory clarity and a wave of aggressive enforcement action are causing established crypto firms to consider leaving the United States and deterring startups from forming there.
Thursday's bill, first drafted in early June, aims to establish a regulatory pathway for crypto exchanges to register with the U.S. Securities and Exchange Commission (SEC), and allow them to trade digital securities, commodities and stablecoins in one place.
“The crypto industry wants clarity and our collaborative bill gives both the CFTC and the SEC a place at the table. Our bill establishes clear principles to ensure financial security and certainty as developers of digital assets continue to innovate,” Dusty Johnson (RS.D.) said in the statement.
Gabriel Shapiro, general counsel for Delphi Labs, noted a change from the June discussion draft that he said "completely changes the prop[osition] of the bill" and would reintroduce the ambiguity it seeks to remove.
On page 10, the revised bill excludes from the definition of "digital assets" a range of traditional securities such as stocks, bonds, "transferable stocks[s]," "certificate[s] interest or participation in any profit-sharing agreement", etc.
As a result, Shaprio wrote on Twitter, a range of assets found in the decentralized finance (DeFi) market, such as Compound's cTokens or Liquid Collective's Liquid Staking Tokens, "would be highly regulated under this provision even if [they are] not under current law."
"The SEC can always go the warpath...all it has to do is argue that a token is a 'transferable stock' 'beneficial interest' etc," he warned.
UPDATE (July 20, 22:03 UTC): Add context in the third paragraph.
UPDATE (July 20, 23:00 UTC): Adds links to the invoice and an industry lawyer's first reaction.