The US House of Representatives Passes the FIT 21 Bill, Defining New Boundaries for Crypto Assets Regulation

Recently, the "Financial Innovation and Technology Act for the 21st Century" (referred to as FIT 21) was passed in the U.S. House of Representatives. This bill, led by the Republican Party but also receiving some support from Democrats, aims to clearly delineate the responsibilities of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) in the regulation of Crypto Assets.

For a long time, the SEC and CFTC have had overlapping functions in the regulation of Crypto Assets, resulting in a harsh and complex regulatory environment. For Crypto projects, due to the stricter regulations of the SEC, they are more inclined to be classified as commodities rather than securities. The FIT 21 Act proposes clear classification criteria: if the project party does not have direct control over the token and holds no more than 20% of the tokens or voting rights, then the token will be considered a commodity and regulated by the CFTC.

This standard may accelerate the decentralization process of crypto projects. Many projects often claim to follow a development path of "starting with centralization, introducing community governance, and ultimately achieving complete decentralization," but in reality, they often stagnate at the initial stage. If the FIT 21 bill is ultimately passed, it may promote the emergence of more truly decentralized applications.

It is worth noting that the FIT 21 Act also establishes public offering conditions for crypto assets classified as commodities, including a valuation of less than 75 million USD and a retail participation rate not exceeding 10%.

However, there is still uncertainty about whether the bill can ultimately become law. It also needs to pass in the Senate, and both the White House and the SEC Chairman are taking a cautious stance on this. President Biden has veto power, which could affect the bill's final fate.

The bill also emphasizes the United States' dominant position in the development of the next generation of the internet, reflecting America's consistent awareness of technological leadership.

Although the prospects of the FIT 21 Act are still unclear, it undoubtedly provides new ideas for the restructuring of the Crypto Assets regulatory framework and may have a profound impact on the development of the entire industry.