House Democrats Hold Firm on Voting Process

Democratic Party leaders, Maxine Waters and David Scott, have expressed strong opposition to two crypto bills proposed by Republicans in the US House of Representatives. While they will not force House members to vote against the bills, they are encouraging them to do so. The bills, if enacted, would benefit the crypto industry, but Waters and Scott have concerns about the disruption to established legal precedents and the introduction of unpredictability into the securities market. In an email obtained by Politico, the office of the Democratic Whip stated that the bills provide a safe harbor for entities to file an “intent to register” and protect them from securities law rules and regulations. A “Dear Colleague” letter published on the Democrats’ page of the House Financial Services Committee further explains their stance against the bills, referring to one of them as the “Not Fit for Purpose Act.” The bills have received support from the US crypto industry and lobbyists, but Waters and Scott argue that they would preempt state regulations, impair fiduciary obligations, undermine capital markets, and prevent shareholders from suing publicly traded companies. In addition, the Democratic Whip’s office urged lawmakers to vote against a bill introduced by Majority Whip Tom Emmer to prevent the Federal Reserve from issuing a central bank digital currency, citing concerns about its broad definition of CBDCs. Proponents of the bills include Coinbase, Kraken, Andreessen Horowitz, and other companies and organizations in the digital assets sector. The bills aim to establish a regulatory framework for digital assets in the United States and expand the authority of the Commodity Futures Trading Commission (CFTC) to regulate digital commodities. They also require the CFTC and Securities and Exchange Commission (SEC) to issue joint rules for assets not otherwise classified and define whether a digital asset is a security or a commodity.