Gary Gensler opposes crypto regulation bill FIT21 ahead of House vote

U.S. SEC Chairman Gary Gensler said on Wednesday that the 21st Century Financial Innovation and Technology Act (FIT 21) will harm investors and hinder the work of the SEC. He said FIT 21 will create new regulatory gaps, undermine decades of precedent on investment contract regulation, and expose investors and capital markets to immeasurable risks. FIT21 is a bill jointly proposed by the House Agriculture Committee and the House Financial Services Committee to clarify how the SEC and the Commodity Futures Trading Commission (CFTC) regulate cryptocurrencies. The bill creates the term "digital commodities" for digital assets that do not meet the definition of securities, placing these assets under the supervision of the CFTC. Gensler believes that FIT21 can allow cryptocurrency companies to self-certify that their cryptocurrency investments and products are "decentralized" and belong to the "special category" of "digital commodities", thereby avoiding SEC review. Gensler said the agency's ability to challenge these self-certifications will be limited by resource constraints, which may result in the vast majority of the cryptocurrency market being unregulated. Gensler also said the bill excludes cryptocurrency trading platforms from the definition of an exchange and repeals historically tested frameworks such as the Howey test, which will ultimately put investors at risk. The House is expected to vote on the bill later Wednesday. (CoinDesk)