The U.S. House of Representatives passed H.R. 4763, the “Financial Innovation and Technology for the 21st Century Act”, known as FIT21. It establishes federal requirements over digital asset markets and provides the Commodity Futures Trading Commission (CFTC) with new jurisdiction over digital commodities. It also clarifies the Securities and Exchange Commission’s jurisdiction over digital assets that are offered as part of an investment contract. The bill creates a process to permit the secondary market trading of digital commodities if they are part of an investment contract. FIT21 requires customer disclosure, asset safeguarding, and operational requirements on all entities that must register with either of the commissions. House Agriculture Committee Chair Glen “G.T.” Thompson says the bill underscores the Agriculture Committee’s efforts to establish a regulatory framework. Thompson was one of the representatives to introduce the bill last year. It passed this week 279 to 136, with all but three republicans voting in favor. Democrats were split, with 71 voting in favor and 133 voting against. FIT21 now moves to the Senate.
The following was provided in a news release from House Agriculture Committee Chair Glen Thompson (R-PA).
FIT21 will protect consumers by strengthening transparency and accountability with market participants:
- Digital asset developers will be required to provide accurate, relevant disclosures, including information relating to the digital asset project’s operation, ownership, and structure; and
- Digital asset customer-serving institutions, like exchanges, brokers, and dealers will be required to:
- Provide appropriate disclosures to customers;
- Segregate customer funds from their own; and
- Reduce conflicts of interest through registration, disclosure, and operational requirements.
FIT21 will strengthen the market by protecting digital asset projects:
- Digital asset developers will have a pathway to raise funds; and
- Participants will have a clear process to determine which digital asset transactions are subject to the SEC’s jurisdiction and the CFTC’s jurisdiction.
FIT21 will protect digital asset customer-serving institutions by:
- Establishing clear lines between the SEC and CFTC; and
- Creating comprehensive registration regimes to permit them to lawfully serve customers in digital asset markets.
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Sabrina Halvorson
National Correspondent / AgNet Media, Inc.
Sabrina Halvorson is an award-winning journalist, broadcaster, and public speaker who specializes in agriculture. She primarily reports on legislative issues and hosts The AgNet Weekly podcast. Sabrina is a native of California’s agriculture-rich Central Valley.