SEC Chair Gary Gensler Slams FIT2I, Cites “Immeasurable Risk” To Investors
United States Securities and Exchange Commission (SEC) Chair Gary Gensler released a statement Wednesday morning criticizing the Financial Innovation and Technology for the 21st Century Act (FIT21) ahead of the crypto regulation’s expected vote in the House today.
In a blog post published on the SEC’s website Wednesday, Gensler claimed the bill would in part “create new regulatory gaps and undermine decades of precedent regarding the oversight of investment contracts,” ultimately “putting investors and capital markets at immeasurable risk.”
In particular, the federal regulator argued that FIT21 would work against already established securities law by negating the long-accepted Howey Test while reneging current regulations on investment contracts, allowing crypto operators to “self-certify” their products.
“The crypto industry’s record of failures, frauds, and bankruptcies is not because we don’t have rules or because the rules are unclear. It’s because many players in the crypto industry don’t play by the rules,” Gensler continued.
“We should make the policy choice to protect the investing public over facilitating business models of non-compliant firms.”
Gensler’s commentary comes amidst a wave of momentum for crypto regulation on Capitol Hill, signaling potential pushback from U.S. lawmakers over the SEC’s current regulatory regimen towards digital assets.
Earlier this month, both chambers of Congress voted on a resolution that would effectively overturn the SEC’s controversial crypto accounting guidance known as SAB121.
In a statement shortly following the vote disavowing SAB121, pro-crypto Senator Cynthia Lummis (R-WY) claimed it was “a win for financial innovation and a clear rebuke of the way the Biden admin and Gary
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