United States of America: Passed Financial Innovation and Technology for the 21st Century Act (HR 4763)

On 22 May 2024, the Financial Innovation and Technology for the 21st Century Act (HR 4763) was passed by the United States House of Representatives. The Act defines digital assets as “any fungible digital representation of value that can be exclusively possessed and transferred, person to person, without necessary reliance on an intermediary, and is recorded on a cryptographically secured public distributed ledger” and outlines disclosure requirements, including risks, source code, project economics, development plan, related and affiliated persons. Furthermore, the Act outlines criteria that digital assets have to meet to be considered a digital commodity and be exempt from the disclosure requirements. The Act would require providers of digital assets to register with the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) and outlines exemptions from the registration obligation. The Act would require digital commodity brokers and dealers to register to operate and comply with business conduct requirements. Finally, the Act mandates that the CFTC and SEC formulate regulations to establish clear definitions for specific terms and to exempt exchanges registered with both agencies from redundant regulatory requirements.