Crypto Bills Didn’t Die Last Session: Lawmakers Plot Reintroductions

Several crypto bills that never made it out of committee last session are making their second run at becoming law this year

article-image

rarrarorro/Shutterstock modified by Blockworks

share

More than 50 legislative items relating to crypto and digital asset policy made their debut on Capitol Hill last Congressional session. Industry members can expect to see some make a second appearance this session, lawmakers say.

Here’s a breakdown of some of the bills already giving the legislative process another try, and what we can expect to see on the docket soon. 

Warren’s planned take two

Sen. Elizabeth Warren, D-Mass., said in a hearing earlier this year that she would be giving her Digital Asset Anti-Money Laundering Act another go on the Senate floor this session. The law, introduced in December 2022, was intended to bring crypto and digital asset companies into the current anti-money laundering and anti-terrorism framework. 

The bill proposes any entities that maintain public blockchains, including validators and software developers, be required to register as a financial institution and submit know your consumer and compliance materials. Critics said the bill, introduced in the shadow of FTX’s collapse, enhances surveillance but would not have prevented the exchange’s failure as FTX was operating illegally under existing law. 

Retirement plan legislation 

The Financial Freedom Act, first introduced in May 2022, already made its second debut in the Senate when sponsor Tommy Tuberville, R-Ala., brought an amended version to the floor in February. The new and improved version seeks to expand crypto investment opportunities for retirement funds by prohibiting the Department of Labor from limiting options that may be available to 401(k) plan participants through self-directed brokerage windows.

“Meddling in 401(k) investments through overregulation restrains financial growth and restricts personal liberty,” Tuberville said in a February statement. “The federal government shouldn’t choose winners and losers in the investment game.”

The proposed law’s sister bill in the House, also dubbed the Financial Freedom Act, made its second rounds in February when Rep. Byron Donalds, R-Flo., reintroduced an amended version. 

Bipartisan effort 

Sens. Cynthia Lummis, R-Wyo., and Kirsten Gillibrand, D-N.Y., introduced their bipartisan Responsible Financial Innovation Act late last session. After facing criticism over how the bill defined tokens and how it divided responsibilities between regulatory agencies, the senators went back to the drawing board. 

A revised version of the legislation is scheduled to be introduced this month, Sens. Gillibrand and Lummis said during a joint appearance in March.

New tax proposals 

Reps. Patrick McHenry, R-N.C., and Ritchie Torres, D-N.Y., brought their Keep Innovation in America Act back to the Hill this session. The proposed law would push new broker tax reporting requirements for transactions greater than $10,000, set to launch in 2024 to 2026.

The bill’s goal is to narrow the definition of broker, which became a hot topic when lawmakers were pushing President Biden’s infrastructure plan through. Brokers should not include miners and software developers for the purpose of reporting requirements, Torres and McHenry argue. 

What’s next 

Simply bringing revamped legislation back to the table is not enough to guarantee policy changes, though, lawmakers admit. Appealing to top committees at the right time is crucial when trying to push bills through. 

The Senate Banking Committee did not mark up Lummis and Gillibrand’s bill, the senators admitted, a key step in advancing the policy. Historic crypto-skeptic Sen. Sherrod Brown, D-Ohio, heads the committee, which held a hearing in February to discuss the fallout from FTX

Crypto investment vehicles are “speculative products run by reckless companies, we know that’s true,” Brown said during the hearing.  

“It would require, certainly, a change in approach for the Banking Committee to move forward with markup,” Lummis said in March, referring to the Committee’s decision to consider the Responsible Financial Innovation Act.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2023

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research Report Cover Vertex.jpg

Research

The proliferation of new perp DEXs has led to fragmented liquidity across various DEXs and chains. Vertex, known for its vertically-integrated DEX that includes spot, perpetual, and integrated money markets, is now tackling cross-chain liquidity fragmentation through horizontal integration with the launch of new Edge instances. Vertex's integrated offerings and cross-margined account structure amplify the benefits of new instances: native cross-chain spot trading, optimized cross-chain basis trading, consistent interest rates, reduced bridging friction, and more.

article-image

I’ve come to the realization that more attention is needed to create and sculpt the digital spaces where we live

article-image

The NYSE went down yesterday after a glitch caused a string of erroneous trades. Does DeFi fix this?

article-image

Partnering with EtherFi and Angle, the fully on-chain perp DEX features bespoke collateral

article-image

Sponsored

Gavin Wood introduced the next evolutionary step for the Polkadot network: the Join-Accumulate Machine, or JAM

article-image

The side events were the places to be at Consensus 2024, according to attendees

article-image

Also, who’s come out swinging in the spot ether ETF fee war — and who could undercut them