On, May 22, 2024, the U.S. House of Representatives passed H.R. 4763, Financial Innovation for Technology for the 21st Century Act (FIT21). The legislation was touted by the House Financial Services Committee’s Chairman Patrick McHenry (R-NC) as “provid[ing] the regulatory clarity and robust consumer protections necessary for the digital asset ecosystem to thrive in the United States.” While this is the first time a major piece of crypto legislation has cleared either chamber of Congress, the bill’s future in the Senate is unclear. Nonetheless, the bill’s framework is noteworthy and, were it to become law, would impose new operational and technological requirements for digital asset providers, exchanges, and brokers.
Overview
FIT21 primarily does two things:
- It seeks to clarify and divide regulatory responsibility by classifying digital assets as either “restricted digital assets” regulated by the Securities and Exchange Commission (SEC), or “digital commodities” regulated by the Commodity Futures Trading Commission (CFTC).
- It obligates certain actors in the digital asset space to comply with registration and disclosure requirements relating to the blockchain system on which a digital asset exists, as well as the underlying source code, transaction history, and economics of the token and platform in question.
