SEC Chairman Gary Gensler has posted commentary on the Financial Innovation and Technology for the 21st Century (FIT21) Act.
First introduced in 2023, the legislation has recently re-emerged, moving forward in the House and a looming floor vote. The legislation aims to clarify the digital asset sector. It also seeks to clarify which agency will have oversight over different digital assets. The House bill has gained the support of several Democrats, making passage more likely.
In a statement today, Chairman Gensler claimed that FIT21 will “create new regulatory gaps and undermine decades of precedent regarding the oversight of investment contracts, putting investors and capital markets at immeasurable risk.” Gensler has bulleted out a list of concerns while claiming the legislation would “eliminate the current Regulation A and Regulation D offering restrictions for crypto securities by creating a new exempt offering framework undermine decades of precedent regarding the oversight of investment contracts, putting investors and capital markets at immeasurable risk.”
Going further, Gensler states that FIT21 would “undermine the broader $100 trillion capital markets.”
While the digital asset industry has complained for years that clear-cut rules have not been created for digital assets, Gensler says the crypto failures and frauds are not due to missing regulations or because rules are unclear. Rather, it is because industry participants do not play by the rules.