On Wednesday, the U.S. House of Representatives passed a bill aimed at creating new legal frameworks for digital currencies, despite rare warnings from U.S. securities regulators that the bill could pose new financial risks.
The "21st Century Financial Innovation and Technology Act," supported by the Republican Party, passed with bipartisan support in a vote of 279 to 136. However, it is still unclear whether the Senate will discuss the bill.
Supporters in Congress believe the bill will provide regulatory clarity and help promote industry growth.
The House's approval comes as the U.S. Securities and Exchange Commission (SEC) signaled it may approve an application for a spot Ethereum trading fund, a surprising positive for the industry.
However, SEC Chairman Gary Gensler stated in a statement that the bill "will create new regulatory gaps and upend decades of precedent regarding the regulation of investment contracts, posing immeasurable risks to investors and capital markets."
The bill has received support from cryptocurrency advocates and industry organizations who have long considered the SEC, under Gensler's leadership, an obstacle to the widespread adoption of digital assets.
Given high-profile prosecutions, fraud cases, bankruptcies, and failures, Gensler has insisted that cryptocurrencies should follow the same laws as other assets.
In a statement on Wednesday, he said that under the bill, investment contracts recorded on the blockchain would no longer be considered securities, thereby depriving investors of protections under the securities laws.
Among other criticisms, Gensler also pointed out that the bill would allow issuers of crypto investment contracts to self-certify their products as digital commodities not regulated by the SEC, with the SEC having only 60 days to object to this certification.
