Bitcoin and ethereum rally on proposed crypto legislation

Bitcoin (BTC-USD) and ethereum (ETH-USD) are rising this week as investors are optimistic about a new regulatory framework and approval of an ether ETF that could boost the industry. Yahoo Finance Reporter Jennifer Schoenberger has more information about new legislation that could change the cryptocurrency sector.

The House will vote today for the first time on cryptocurrency legislation known as the Financial Innovation and Technology for the 21st Century Act, or FIT21. This law would make the Commodity Futures Trading Commission (CFTC) the primary regulator of digital assets and establish consumer protections.

Republican lawmakers say FIT21 will bring clarity to the cryptocurrency industry, while Democrats believe it would effectively deregulate most cryptocurrencies by removing them from the purview of the Securities and Exchange Commission (SEC).

The vote will take place today around 5 pm Eastern Time and is expected to pass. However, the future of FIT21 in the Senate remains unclear.

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This post was written by Melanie Riehl.

Video transcript

Let's now move on to cryptocurrencies, both Bitcoin and Ethereum.

This week, investors flocked to Washington, DC, hoping that regulation and new products could broaden the industry's overall appeal.

Joining us now to lay out what's on the table for crypto in Washington is on us.

Jennifer Schomer, Jen.

Good morning Shana.

That's how it is.

The cryptocurrency world hopes to make some gains this week in Washington as it pushes for a new regulatory framework and the approval of an ETF.

Today, the House is set to vote for the first time on comprehensive crypto legislation called the 21st Century Financial Technology and Innovation Act, or 21 as it is known.

This legislation that House Financial Services Chairman Patrick McKenry has been pushing for most of the year would establish the future of commodities and the commission as the primary regulator of digital assets.

There would be clear divisions over what the CFTC will regulate and what would fall under the purview of the Securities and Exchange Commission, which has vehemently cracked down on the crypto industry with a litany of enforcement actions.

This legislation would also establish consumer protections and borrow from the type of custom fund pooling that played a role in the downfall of crypto exchange FTX in 2022.

Now, Republican lawmakers say this legislation will bring clarity to the crypto industry.

But majority Democrats led by the House Financial Services Committee, ranking member Maxine Waters, opposed the bill and warns that the bill would effectively deregulate most cryptocurrencies by removing them from the scope of jurisdiction of the SEC.

In a rare rebuke, SEC Chairman Gary Ginzler issued a lengthy statement this morning on the legislation, saying, quote, that it would create new regulatory loopholes and undermine decades of precedent regarding the oversight of investment contracts, putting investors in capital markets at measurable risk. .

The House was expected to vote on this legislation around 5 pm this afternoon, where it is expected to pass largely thanks to support from Republicans and a handful of Democrats.

But the prospects in the Senate persist.

Dimmer McKenry told reporters yesterday afternoon that he is hopeful that a strong vote count will prompt the Senate to take another look at this legislation.

Meanwhile, elsewhere here in Washington, the SEC is reportedly facing a May 23 deadline, which is tomorrow for approval or denial of an ETF. When I asked the SEC for comment, they said we don't comment on individual filings.

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