After months of hype, Lummis-Gillibrand crypto bill is more media event than law

The introduction of the landmark “Responsible Financial Innovation Act” on June 7 was a big moment for the crypto world. The actual bill, however, has left many in crypto as well as Congress underwhelmed.

Senator Cynthia Lummis (R-WY) had been teasing her work on the bill since late 2021, amid a massive bull market and in the aftermath of the Infrastructure Act, which saw an unprecedented collision of the crypto industry and Washington, DC. 

A laundry list of media appearances focused on the bill, drawing new levels of attention from mainstream outlets. Senator Kirsten Gillibrand (D-NY) joined Lummis at a Grayscale-sponsored Politico Live event in March to announce her engagement on the bill — granting it the descriptor “bipartisan.” 

Lummis also appeared at Bitcoin Miami in April. She spoke on a bill with Ted Cruz at an event at the Heritage Foundation, a conservative think tank, at the end of May. It was there that she formally announced the June 7 date of introduction. The next day, both Gillibrand and Lummis appeared at an event by crypto trade association Chamber of Digital Commerce. 

The day after the bill’s introduction, Lummis and Gillibrand appeared at a Washington Post Live event also sponsored by crypto asset manager Grayscale. Joining them was CFTC Chairman Rostin Behnam.

Prior to the bill’s introduction, the long list of media appearances did not entail the release of any language of the bill. Indeed, the teams behind the bill were extremely protective of the actual text, despite presenting isolated provisions like a de minimus tax exemption or a larger role for the Commodity Futures Trading Commission in those public appearances. 

In response to The Block’s May 27 publication of a full draft of the bill, Senator Lummis tweeted that “Any language circulating online is an incredibly outdated version from March 1.”

Given the extensive public relations work on the bill during its development, its final introduction on June 7 was inevitably going to be a significant event for the cryptocurrency industry as well as the broader public. 

But the scene had changed. The collective crypto market cap has slipped from $3 trillion to $1.3 trillion, and the collapse of TerraUSD last month has many in power looking askance at the industry's ability to self-police.

Moreover, while almost every crypto firm with a DC presence has put out some sort of statement of support for the effort of the bill, the reaction among the industry to its actual language is decidedly mixed. Many are clearly looking at the bill as a work in progress.

“A great jumping-off point,” wrote the Stellar Foundation’s chief legal officer, Candace Kelly. 

The crypto trade associations expressed similar thoughts. In a statement, Perianne Boring, executive director of the Chamber of Digital Commerce, described the bill as “a foundational, comprehensive start.”

Jake Chervinsky, head of policy at the Blockchain Association, tweeted that “I & @BlockchainAssn are excited to continue working with both offices to make this bill the best it can be, & then to make it the law of the land.”

Partially, that is due to the scale of the bill, which encompasses broad spectrum of issues. No one individual party is pleased with the whole thing. But many parties within the industry are happy to have the mass attention on the bevy of issues facing them. 

There is also the reality that such expansive issue-specific bills generally only pass into law in response to massively eye-catching and controversial events or with small sections rolled into larger omnibus bills. 

Also factoring into the bill’s reception is that congressional midterm elections are coming up in November, with an anticipated flip away from the current narrow Democratic majority in the House of Representatives and potentially the Senate as well. Campaign season is therefore in high gear, taking many lawmakers away from lawmaking. 

Consequently, the likelihood of even pieces of the current legislation passing into law this Congress is minimal.