Founder of the automated Ethereum-based cryptocurrency exchange Uniswap, Hayden Adams commented on the upcoming vote by the United States House of Representatives on the Financial Innovation and Technology for the 21st Century (FIT21) Act anticipated this week. He remarked that the changing approach to centralized finance (CeFi) and decentralized finance (DeFi) signifies a notable advancement for the entity in cryptocurrency regulation.
The FIT21 Act represents a bipartisan bill designed to regulate CeFi and prevent incidents similar to the FTX collapse. It is aimed at streamlining cryptocurrency regulation across the United States by establishing a clear regulatory framework for digital assets, considering their unique characteristics, and ensuring consumer protection.
In a post on the social media platform X, Hayden Adams highlighted the bill’s view on DeFi as it states that “a person shall not be subject to this Act… in relation to decentralized finance.” The bill also calls for research on DeFi, paralleling the European Union’s approach to cryptocurrency regulations with the MiCA framework.
Hayden Adams emphasized that Congress’s acknowledgment that CeFi and DeFi are entirely different and demand distinct approaches represents a notable development and a positive step toward the regulatory progress in the country.
Uniswap Labs, a key contributor to the Uniswap Protocol and its ecosystem, received a Wells Notice from the Securities and Exchange Commission (SEC) last month. This notice served as a warning that federal regulators may initiate a lawsuit against the company as part of a broader ongoing regulatory crackdown on DeFi.
This week, the House plans to vote on FIT21, a bipartisan bill that aims to regulate CeFi to stop another FTX. On DeFi, the bill says “a person shall not be subject to this Act… in relation to decentralized finance” and proposing a study of DeFi in the meantime, similar… pic.twitter.com/iPuTYTaojp
— hayden.eth (@haydenzadams) May 20, 2024
Digital Asset Industry Supports FIT21 Act With Backing From Coinbase, Kraken, And Andreessen Horowitz
FIT21 Act has garnered support from a coalition of digital asset organizations and companies, which includes Coinbase, Kraken, Andreessen Horowitz, among 50 others. Supporters argue that it offers a much-needed regulatory framework for the digital assets industry, addressing a current gap in regulation within the United States.
The bill sets criteria for identifying whether a digital asset is a security or a commodity. It broadens the authority of the Commodity Futures Trading Commission (CFTC) to register and oversee digital commodities. Additionally, it mandates collaboration between the CFTC and the SEC to elaborate regulations for assets that don’t fit existing classifications.
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