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David Vance

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 The US House of Representatives passed the Financial Innovation and Technology for the 21st Century Act (or FIT21) on Wednesday, in a vote of 279 to 136.
 Marking an apparent turning point in US political opinion towards crypto, 71 Democrats voted for the bill, despite the White House voicing concerns that it “lacks sufficient protections,” and urging for “further time” for “continued collaboration.”
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 FIT21 passes the Ho<a rel="noopener noreferrer nofollow" title="US" href="https://thebittimes.com/tag/us.html">US</a>e 279 – 136 Ho<a rel="noopener noreferrer nofollow" title="US" href="https://thebittimes.com/tag/us.html">US</a>e Democrats voting in favor of this bill: 71. That is a *huge* number of elected Democrats voting "no confidence" in the current SEC, and sending a message to the Biden administration that "anti-crypto" is a losing platform this year. pic.twitter.com/zmlD1VRQfF— Jake Chervinsky (@jchervinsky) May 22, 2024
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 The bill could still be blocked by the Senate before becoming law, something that some in the crypto Q<a rel="noopener noreferrer nofollow" title="US" href="https://thebittimes.com/tag/us.html">US</a>yGuF may be banking on.
 Crypto advocates have long been calling for regulatory clarity in the face of what they see as an aggressive and intentionally vague Securities and Exchange Commission (SEC). However, while the bill appears to deliver a clearer set of rules, some remain cynical.
 <h2 class="wp-block-heading" id="the-good">The good</h2>
 The bill sets out a ‘five-prong decentralization test’ to potentially classify certain assets as commodities, explains drjasper_eth of liquid staking protocol RocketPool.
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 Short thread on the most important aspect of the FIT 21 bill – the five prong decentralization test to determine whether or not an asset is a digital commodity. Expect all protocols with goals of decentralizing to be paying very close attention to this test. Bill text below pic.twitter.com/RR86MPff4R— jasperthefriendlyghost.eth (@drjasper_eth) May 23, 2024
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 Read more: Is Uniswap becoming more TradFi than DeFi?&nbsp;
 The criteria focus on elements of control, ownership, and upgradability via governance, as well as rules on marketing as an investment and who is eligible to receive new tokens.
 Classification as a commodity would be an advantage to projects that are sufficiently decentralized, keeping them out of reach of the SEC’s enth<a rel="noopener noreferrer nofollow" title="US" href="https://thebittimes.com/tag/us.html">US</a>iastic approach in pursuing actions against crypto companies.
 Many smaller and early-stage crypto projects are currently unlikely to meet the definition, but this could prove beneficial in weeding out the many ‘decentralized in name only’ (DINO) teams that are rampant in the industry.
 TradingProtocol co-founder Mikko Ohtamaa predicts that the bill, if it passes, would “[pave] the road for clean blockchain development,” resulting in “all blue-chip blockchains and protocols [moving] to the United States from the shady island countries where they currently reside.”
 Read more: Uniswap received a Wells notice — now what?&nbsp;
 <h2 class="wp-block-heading" id="the-bad">The bad</h2>
 Others, though, are hoping that the bill doesn’t make it past the Senate, believing that it amplifies the reach of the Commodity Futures Trading Commission (CFTC), which already has a worrying track record when it comes to crypto enforcement.
 Crypto lawyer Gabriel Shapiro argues that this moving of the goalposts represents the worst of both worlds, a “dual regulatory regime.”
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 it does not even shift agencies; SEC would still have huge power it provides for a dual regulatory regime, split between SEC and CFTC it does this by giving the CFTC authority it never had–regulatory authority over a spot commodities market pic.twitter.com/Iaoy51cWns— _gabrielShapir0 (@lex_node) May 22, 2024
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 Read more: Ooki DAO ghosting CFTC lawsuit could see it lose the case&nbsp;
 In another post on X (formerly Twitter), Shapiro claims that many crypto policy experts are aware of this and are secretly rooting against the bill. He goes on to outline his own frustrations working on an early version of the bill before losing faith, describing material in later versions as “clearly coming from CFTC input to make sure they can still regulate DeFi to the ground.”
 <h2 class="wp-block-heading" id="h-who-cares">Who cares?</h2>
 Bankless’ David Hoffman is aware of the problems with the bill, but is keen to celebrate what he calls a “vote of confidence in crypto” regardless.&nbsp;
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 From my understanding, yes FIT21 is not something to be excited about in terms of actual policy But that’s fine, beca<a rel="noopener noreferrer nofollow" title="US" href="https://thebittimes.com/tag/us.html">US</a>e it’s not going to ultimately get passed And so the ho<a rel="noopener noreferrer nofollow" title="US" href="https://thebittimes.com/tag/us.html">US</a>e vote today is really j<a rel="noopener noreferrer nofollow" title="US" href="https://thebittimes.com/tag/us.html">US</a>t a vote of confidence in crypto.— DavidHoffman.eth/acc (@TrustlessState) May 22, 2024
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 However, as Shapiro again points out, cheerleading bad policy purely because of optics will only hamper efforts to resist it down the line. “We will look like complete hypocrites,” he says.
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Source: <a rel="noopener noreferrer nofollow" target="_blank" href="https://thebittimes.com/crypto-community-split-on-fit21-bill-is-it-good-or-bad-news-tbt89545.html">https://thebittimes.com/crypto-community-split-on-fit21-bill-is-it-good-or-bad-news-tbt89545.html</a>

Crypto community split on FIT21 bill — is it good or bad news?

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