The US House of Representatives is preparing to vote on a major crypto bill that aims to clarify how digital assets are regulated.
The bipartisan Financial Innovation and Technology for the 21st Century Act would give the Commodity Futures Trading Commission (CFTC) the authority to regulate crypto assets as commodities if the blockchain they run on is sufficiently decentralized.
The bill says that decentralized blockchains cannot be controlled unilaterally by one person. The potential legislation also stipulates that no single issuer or affiliate can control 20% or more of a decentralized chain’s digital assets or voting rights.
Digital assets associated with blockchains that are not decentralized would be regulated as securities by the Securities and Exchange Commission (SEC).
Eight Republicans and three Democrats have supported the bill, which is expected to be voted on this week.
The Blockchain Association, a crypto lobby group, has expressed support for the potential legislation, and a16z Crypto, the digital asset investment arm of venture capital giant Andreessen Horowitz, says the law would “give blockchain projects a path to launch safely and effectively” in the United States.
Democratic leaders in the House of Representatives have no plans to oppose the bill but have expressed opposition to the potential legislation, according to a report by Politico journalist Eleanor Mueller.
In an email to Democratic House members, party leadership said the bill “undermines decades of legal precedent and case law, creating uncertainty in our traditional securities market.”
“The bill also provides a safe harbor in which entities can file an ‘intent to register’ if they meet certain requirements, effectively protecting them from SEC rules and regulations until SEC and CFTC finalize their rules, which will enhance investor protection weakened and opens the door to fraud and market manipulation.”
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