In a tweet on July 13, Justin Slaughter, policy director at research firm Paradigm and a former SEC senior advisor, expressed his opinion on the future of the Lummis-Gillibrand Responsible Financial Innovation Act bill.
He stated, “This bill is less likely to pass than McHenry-Thompson for one simple reason: neither Lummis or Gillibrand lead a Senate committee.”, indicating the bill may not pass the U.S. Congress due to the lack of committee leadership from its sponsors.
The Senators Cynthia Lummis and Kirsten Gillibrand-sponsored bill seeks to provide regulatory clarity for the emerging crypto industry. It grants the Commodity Futures Trading Commission (CFTC) oversight functions over crypto exchanges.
The bill failed to garner much support at its inaugural launch last year and was relaunched on July 12.
Why the bill could fail.
Slaughter explained that every bill in Congress needs the chairman and ranking members’ support in each Committee to determine whether it passes the initial stage.
According to Slaughter, the Lummis-Gillibrand bill faces significant opposition as the chairman of the Senate Banking Committee, Senator Sherrod Brown, previously showed apathy to it. Additionally, other Democrats on the Banking Committee were not particularly warm about its cause.
The former SEC senior adviser noted that even if the bill gets enough support to pass the Committee, it might never get a Senate hearing because of Senator Brown’s opposition. Committee chairs can kill any bill they do not support by failing to bring it up on the Congress floor.
Lummis-Gillibrand bill could still shape crypto legislation.
According to Slaughter, the Lummis-Gillibrand bill could still influence crypto legislation. Key aspects of the bill could be incorporated into another legislative proposal, known as the McHenry-Thompson bill.
Proposed by ranking members of the House Financial Services Committee, the McHenry-Thompson bill aims to clarify the roles of the SEC and CFTC in regulating the cryptocurrency industry.
Slaughter noted that the McHenry-Thompson bill is set for Markup later this month, and Congress members can add as many amendments as possible.
Meanwhile, Slaughter identified about ten parts from the Lummis-Gillibrand bill that should be added to the McHenry-Thompson bill, including the definition of smart contracts, mandatory proof of reserves, CEO attestation, CFTC Funding, criminal penalties for crypto assets crimes, and others.
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