Biden Does Not Threaten Veto Against House Crypto Market Structure Bill, But ‘Opposes Passage’

The White House is against the U.S. House of Representatives passing a crypto market structure bill, but the president isn’t threatening to veto it, in a positive sign for the crypto industry.

U.S President Joe Biden’s White House published a statement of administrative policy Wednesday saying the administration opposed the passage of the Financial Innovation and Technology for the 21st Century Act, citing concerns over a lack of investor protections should it make its way through Congress. The bill also suggested the White House would want to work with Congress on future legislation addressing the crypto markets, in contrast with previous statements from Securities and Exchange Commission Chair Gary Gensler, who has repeatedly said he does not believe the industry needs additional legislation specific to crypto.

“The Administration is eager to work with Congress to ensure a comprehensive and balanced regulatory framework for digital assets, building on existing authorities, which will promote the responsible development of digital assets and payment innovation and help reinforce United States leadership in the global financial system,” the statement said. “H.R. 4763 in its current form lacks sufficient protections for consumers and investors who engage in certain digital asset transactions.”

This is the second statement of administrative policy the administration has published in recent weeks, after threatening a veto against a bill looking to overturn controversial SEC accounting guidance. That bill sailed through the House and Senate.

The statement came hours after the SEC’s Gensler published his own opposing statement on the legislation, saying it would harm the regulator’s efforts to police traditional capital markets as well as crypto markets.

FIT21 would redefine how securities issuers have to comply with existing federal law and Supreme Court precedent, the SEC chair said in his statement.

The bill’s advocates say U.S. law doesn’t allow for crypto companies to operate without the threat of civil litigation, a view Gensler described as these companies trying to get out of meeting disclosure and other compliance requirements for securities issuer.

The bill would create a new definition specific to digital assets, to identify when they’re securities or digital commodities and whether the SEC or Commodity Futures Trading Commission should be the primary spot market regulator. The full House is set to take up the bill later Wednesday, with a vote scheduled for this afternoon.

“The Administration looks forward to continued collaboration with Congress on developing legislation for digital assets that includes adequate guardrails for consumers and investors while creating the conditions needed for innovation, and further time will be needed for such collaboration,” the White House statement on Wednesday concluded.

UPDATE (May 22, 2024, 14:47 UTC): Adds additional detail.