UNCHAINED: Why Many Democrats, Including the White House, Have Come Around on Crypto
May 29, 2024
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Sheila Warren, CEO of the Crypto Council for Innovation, discusses the shift by Democrats on crypto, White House's changing view, SEC's approval of spot ETH ETFs, bipartisan votes, and arguments that persuaded Congress members. Focus on SAB 121, FIT21 bill, and the impact on the crypto industry.
Democrats' changing views on crypto influenced by overturning SAB 121 and FIT21 bill.
Bipartisan support in House and Senate led to White House's favorable crypto stance.
Effective arguments centered on American competitiveness and regulatory clarity resonated with lawmakers.
FIT21 bill aims for clear jurisdictional oversight, collaboration between SEC and CFTC, and regulatory clarity for digital assets.
Deep dives
Impact of Industry Collaboration on Bipartisan Support
The success of garnering 71 Democratic votes for the bill showcased the industry's ability to build strong bipartisan support, ranging from moderate Democrats to progressives. This outcome marked a significant achievement after sustained efforts over two years to engage and educate lawmakers. The collaborative industry coalition letter, signed by nearly 60 key players, including competitors, underscored the shared industry commitment to regulatory clarity and American competitiveness.
Championing the Next Generation of Congress Members
The support from younger progressive members like Jasmine Crockett signified a positive shift in the industry's outreach efforts to engage with the next generation of lawmakers. Their inclusion in backing the bill highlighted the relevance and importance of digital asset legislation beyond party divides. Encouraging the active participation and understanding of new legislators indicated a promising future for bipartisan cooperation.
Resonating Arguments on American Competitiveness and Consumer Protection
The persuasive arguments focused on American competitiveness, consumer protection, and resolving regulatory ambiguity resonated with lawmakers. Highlighting the bill's potential to enhance regulatory clarity and protect investors bolstered its appeal across party lines. Addressing concerns related to SEC and CFTC oversight provided additional reassurance on the bill's comprehensive approach to addressing industry challenges.
Evolving Perceptions Post-FTX SPF and BTT Media Coverage
Despite lingering perceptions from past events like FTX SPF and BTT media coverage, the industry has effectively counteracted damaging narratives through emphasizing convictions under existing laws and the industry's commitment to ethical practices. Continuous engagement and contextualization of past events have contributed to diminishing concerns, with a focus on transparency and educational outreach to reshape public perceptions.
Overview of FIT21 Bill
The FIT21 bill focuses on addressing the jurisdictional matters related to oversight agencies like the CFTC and SEC, ensuring clear rules and roles for each. It aims to formalize the role of the CFTC alongside the SEC, introducing joint rule issuances and provisions like whistle-blowing and insider trading. The bill also defines securities and investment contracts to provide clarity for industry regulation.
Implications of FIT21 for Industry and Regulators
FIT21 signifies a significant change in oversight dynamics by including provisions for faster responses from the SEC and fee structures for CFTC funding. It proposes a collaborative approach between agencies and delineates roles for regulating various asset types. The bill navigates through the complexities of digital assets and strives to establish a clearer regulatory framework.
Political Landscape and Future Outlook
The discussion highlights the political implications of FIT21 for Democrats and their stance on crypto regulation. It emphasizes the need for educating lawmakers and the industry's role in fostering understanding. As the political environment evolves, there is optimism for bipartisan engagement and the potential impact of upcoming elections on crypto legislation.
Sheila Warren, CEO of the Crypto Council for Innovation, joins Unchained to explore the dramatic shift by Democrats in the last few weeks on crypto. She explains why she believes the overturning of SAB 121 and the House vote for the FIT21 bill were both instrumental to the White House's changing view on crypto and may have played a role in the SEC’s surprising approval of spot ETH ETFs.
Having worked for years on passing crypto legislation and as a lifelong Democrat, Sheila describes what kinds of arguments were persuasive to Democratic members of Congress, addresses some criticisms of the FIT21 bill, and gives her perspective on the debate about single-issue voters.
Show highlights:
The overall attitude toward crypto in Washington going into the House vote on SAB 121 on May 8
The bipartisan votes in the House and Senate to overturn SAB 121
Why, by the time of the Senate vote on FIT21, the White House had had a change of heart about crypto
Why, after the Senate vote to repeal SAB 121, the SEC approved the spot ETH ETFs
Why Sheila is so proud of the passage in the House of the FIT21 bill
How Sheila and CCI approached their discussions with Democrats and what arguments they found effective
Whether the industry has survived the negative image of SBF and FTX
The sea change in the White House between the SAB 121 vote and the FIT21 vote
A high-level description of the FIT21 bill
What kind of authority the bill would give the CFTC over crypto
What the implications of the bill are for launching tokens
FIT21’s approach to regulating DeFi and how the FIT21 bill is "kicking the can" on this topic
The overall political and legislation landscape and the next likely steps for crypto
Whether the ETF approval changes anything about the SEC’s investigation into Ethereum
What Sheila thinks about the 'crypto single-issue voter’ debate
Visit our website for breaking news, analysis, op-eds, articles to learn about crypto, and much more: unchainedcrypto.com
Unchained Podcast is Produced by Laura Shin Media, LLC. Distributed by CoinDesk. Senior Producer is Michele Musso and Executive Producer is Jared Schwartz.
