60 crypto firms pitch support for large market structure bill ahead of next week's vote

Sixty crypto organizations are backing a market structure bill that is teed up for a vote next week.

The signers urged House lawmakers to pass the bill in a letter led by the Crypto Council for Innovation and sent to House Speaker Mike Johnson and House Minority Leader Hakeem Jeffries on Thursday. FIT21 would raise "new compliance challenges" for crypto firms, but clear rules are needed, the groups said.

"Currently, digital assets firms are instructed to somehow comply with U.S. securities laws that were designed nearly 100 years ago without consideration of the technological advances of today, including the ability for transactions to move at the speed of the internet," they said in the letter.

House lawmakers will vote on the Republican-led Financial Innovation and Technology for the 21st Century Act, also known as FIT21. The bill takes a comprehensive approach to regulating crypto at large and shifts more responsibility to the Commodity Futures Trading Commission.

"As we all know, no bill is perfect. What this bill does do is establish a comprehensive federal regulatory framework that has been missing," said Ji Kim, CCI's head of global policy in an emailed statement. "We look forward to working with policymakers on next steps to move the industry forward in a way that best protects consumers and ensures innovation stays in the US."

Crypto exchanges Gemini, Kraken and Coinbase and firms Andreessen Horowitz and Digital Currency Group signed the letter, among others.

Uphill climb in the Senate

If FIT21 passes the full House next week, it will face an uphill climb in the Senate. Top Senate Democrats have either not shown interest in it or have opposed it in the past.

Investment bank TD Cowen said last week the bill stood "no chance of becoming law in this Congress" but noted it could shed light on how Democrats and Republicans view critical issues such as anti-money laundering and investor protections.

During the Chamber of Digital Commerce's DC Blockchain Summit this week, Rep. Wiley Nickel, D-N.C., was asked whether Democrats who supported his measure to repeal a crypto accounting bulletin would vote for the FIT bill.

"I think we're going to see a larger group of Democrats in support of the bill," Nickel said.

Votes in the Senate and the House over the past week on Nickel's measure to withdraw the U.S. Securities and Exchange Commission crypto guidance that establishes certain accounting standards for firms that custody crypto garnered some unlikely support from Democrats. Senate Majority Leader Chuck Schumer of New York and Sen. Cory Booker of New York voted in favor of the measure on Thursday.

Schumer told Politico he supported passing the measure to withdraw SAB 121 because "New York State already has a strong law on the books, and they weren’t consulted on this regulation.”