White House Declares It Won’t Veto Crypto Bill Despite Concerns

The House of Representatives passed a bill on Wednesday, May 22, that would place most oversight over cryptocurrency to the highly friendlier agency—potentially putting President Joe Biden in the confusing position of defying his SEC chairman to strike a veto.

Biden’s administration declared it would not use the veto power about the crypto market structure bill under consideration at the U. S. House of Representatives, source press release.

The House passed the “Financial Innovation and Technology for the 21st Century Act” with a vote of 279 to 136, where 71 out of the total were Democrats and 208 Republicans voting in favor of the legislation.

In the published statement of administrative policy released, the Biden administration revealed that it ‘still’ ‘opposes’ H. R. 4763, FIT21- Financial Innovation and Technology for the 21st Century Act because the White House found out that the bill does not provide adequate security for consumers and investors on the digital asset market.

What Is FIT21’s Agenda?

The FIT21 bill, passed by the committee in July 2023 aims to provide some clarification on how digital assets are regulated and outlines the jurisdiction of the US CFTC as well as the SEC over cryptos. It is the first time the committee has advanced crypto-focused legislation with lawmakers noting that these bills are required to secure the US from lacks behind other states in crypto regulation.

If passed, the act will revolutionize the regulation of crypto and grant the industry the much-needed direction. Some notable firms including Kraken, Gemini, Coinbase, and Digital Currency Group have all signed a letter recommending the bill affirming the fact that online firms dealing with crypto are still anchored to security laws that were formulated almost a century ago, says media sources.

Biden Ready To Cooperate With Congress On New Crypto Bill

On May 22, the Biden administration spoke about the development of the FIT21 Act. Most recently, the White House has shown objection to the passage of the bill arguing that it might impact the existing structures of US digital assets.

Biden administration claimed that FIT 21, in its current stage, lacked “sufficient protections for consumers and investors who engage in certain digital asset transactions” and insisted that it needs more time to consult with Congress on digital assets regulation.

Still, the White House noted it remains concerned, but at the same time underscored it is “eager to work” with lawmakers on creating a “balanced and effective” legal regime for digital assets with assistance from Congress.

SEC Chair Gary Gensler’s Remarks

“The bill would exclude investment contracts that are registered on a blockchain from the statutory definition of securities,” cautioned SEC chair Gensler.

“Furthermore, by removing this particular set of investment contracts from the statutory list of securities, the bill implies what courts have repeatedly determined, despite efforts by participants in the cryptocurrency market to dispute it, that a large number of crypto assets are being offered and sold as securities under current law,” says Gensler.

Read More: FinCEN And SEC Mandate Customer ID Program For Investment Advisers

Difficult Situation For House

This notice contrasts with a White House statement released on the 8th of May, in which President Joe Biden signaled his intention to veto the bill that would also override the authority of the SEC on the emerging digital asset sector.

Last week 11 Democrats crossed Biden and Elizabeth Warren’s anti-crypto army, and as a result contributed to the passing of the bill in the Senate, which supports the bill with more bi-partisan backing than anticipated.

The move from Washington, D.C., occurs at a moment when the cryptocurrency industry is changing and growing with more political operations. With these circumstances,  the American businessman, and the Republican Party’s presidential candidate, Donald Trump, declared that he would start accepting crypto for the campaign and create a Bitcoin and crypto fighting force to defeat Biden.

Trump’s recent statement, indicates that his crypto-friendly shift is now applying pressure on Biden’s anti-crypto position.