Ryan Selkis
Posted on by John Ebbert

FIT 21 And CBDC Floor Votes In House This Week; Ryan Selkis And Crypto Politics

FIT 21 – floor vote

The Congressional calculus will be a bit different this week for the “Financial Innovation and Technology for the 21st Century Act” [H.R.4763] or “FIT 21.”

On Friday, Majority Leader Steve Scalise (R, LA) put FIT 21 – a.k.a. the digital asset market structure bill – on the House Floor calendar for a vote this week – looks like either Wednesday or Thursday.

See:

The last two weeks saw the resolution rescinding the Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin 121 (SAB 121) sail through both Houses of Congress and land on President Biden’s desk for signature (more on this in a bit). Pro-crypto advocates have started feeling momentum for the first time since the President’s Executive Order in March 2022.

FIT 21 will most likely not be taken up by the Democrat-controlled Senate even though House Financial Services (HFS) Chair Patrick McHenry (R, NC) said last week he believes a strong showing for FIT 21 could tip the scales toward a vote in the Senate.

Regardless, the vote on FIT 21 will provide an opportunity to see how many House Democrats are willing to break with a Democratic leadership which has expressed only contempt for the bill.

more tips:

FIT 21 – Securities Clarity Act

The embedding of the Securities Clarity Act originally sponsored by Majority Whip Tom Emmer (R, MN) and co-sponsored by Rep. Darren Soto (D, FL) is a late-breaking addition. Re-introduced in May 2023 [H.R.3572], the bill’s purpose according to a release at the time was to “provide clarity to the regulatory classification of digital assets, providing market certainty for innovators and clear jurisdictional boundaries for regulators.”

You can see the Securities Clarity Act beginning on page 65 of the 253-page FIT 21 bill on the Majority Leader’s site.

Whip Emmer said on X on Saturday: “This week, the House will take up two of my landmark pieces of legislation – “The CBDC Anti-Surveillance State Act [and] “The Securities Clarity Act.” These bills will ensure the future of crypto is determined by the American people – not [POTUS] and the Administrative State.”

Could the addition trip up the vote? It seems unlikely.

The fact there is bipartisan support from Whip Emmer and Rep. Soto is a positive supporting passage. And, it seems unlikely that House Republican leadership including Chair Patrick McHenry (R, NC) and House Ag Chair Glenn “GT” Thompson (R, PA) would be adding something that would inhibit Democrats breaking from their leadership.

more tips:

FIT 21 vote – Republicans

So what will the vote look like? Let’s start with Republicans.

First, with former President Donald Trump appearing to embrace crypto two weeks ago, any fracture in the Republican vote – such  as the one which appeared with the House Freedom Caucus in the vote on two blockchain bills last week – is extremely unlikely. Unanimous House Republican support for the bill seems inevitable.

But, maybe there are a few outliers?…. such as Rep. John Duarte (R, CA) who as a member of the House Agriculture Committee expressed disdain for digital assets during that Committee’s markup on FIT 21 last year.

more tips:

FIT 21 vote – Democrats

As for the Democrats, the resolution rescinding SAB 121 revealed a relatively large block of Democrats who are potentially “pro-crypto” as 21 Democrats voted to pass the resolution and broke from Dem leadership.  Could those 21 Dems also join here?

In fact, a brief look at the data says there could be more.

First, looking at the HFS markup for FIT 21 back in July 2023 which included a roll call vote, there were six Dem supporters: Reps. Ritchie Torres (D, NY), Wiley Nickel, Josh Gottheimer (D, NJ), Steven Horsford (D, NV), Brittany Pettersen (D, CO), and Jim Himes, (D, CT).

Himes, Horsford and Pettersen voted against the SEC’s SAB 121 resolution.

In the House Ag markup led by Chair GT Thompson, he opted for a voice vote which passed given the Republican Majority. But fear not, blockchain tipsheet gave its best guess on who may be a “yes” vote among Democratic Members given their participation during that Markup.

Likely-to-possible “yes” votes from House Ag according to our tally include: Reps. Elissa Slotkin (D, MI), Yadira Caraveo (D, CA), Jasmine Crockett (D, TX) and Darren Soto (D, FL).

Also showing interest in the bill at the markup was Reps. Angie Craig (D, MN), Nikki Budzinski (D, IL) and Jim Costa (D, CA).

Of the 7 Democrats above, only Crockett and Budzinski voted against the SEC’s SAB 121 resolution.

Also important here is that Democratic leadership and the White House are on their heels on digital assets coming out of the passage of the SAB 121 resolution by Congress.

Will Members feel emboldened to vote for digital assets legislation knowing that the Administration’s position on digital assets is tenuous or, potentially, shifting?

November elections are approaching and the noisy pro-crypto industry is making its presence and campaign dollars felt. Gonna be interesting.

CBDC bill – Republicans

Also reaching the floor this week, as noted by Whip Emmer on Saturday, is his “CBDC Anti-Surveillance State Act” [H.R.5403].

This is a message bill focused on preventing the Fed from rolling out a Central Bank Digital Currency (CBDC). Republicans hope to use the issue with voters.

Moreover, powerful Conservative lobbyist Heritage Foundation announced that if you want to score points with Heritage, being anti-CBDC and co-sponsoring the bill is essential.

CBDC bill – Dems

Support from House Democrats is unimaginable for this CBDC bill given the context (Heritage, all Republican co-sponsors) even though some Dems have expressed misgivings about CBDCs -such as Rep. Jake Auchincloss (D, MA) who sponsors another bill circumspect about CBDCs called the “Power of the Mint Act” [H.R.3402], which prevents the Federal Reserve from issuing a CBDC.

That bill includes Republican cosponsors Reps. French Hill (AR) and Barry Moore (AL) and three Democrats: Reps. Ritchie Torres (NY), Wiley Nickel (D, NC) and Marie Gluesenkamp Perez (WA).

SAB 121 – Veto?

Will Biden veto the SAB 121 resolution this week amidst the FIT 21 vote? Watch TV.

The Dem leadership battle plan has often been that whenever a digital assets hearing or similar was underway – almost always led by House Republicans – a digital assets enforcement action would be announced and/or SEC Chair Gary Gensler would go on TV and talk about the lack of compliance by crypto companies. Even President Biden’s veto announcement on May 8 was well-timed to the House Floor vote.

Congressional staff moves

Michael Cameron, who has served as Professional Staff for Republicans on the House Energy and Commerce Committee, is leaving his post effective at the end of the week. Cameron will remain in D.C. and be joining Confusion Capital as Chief of Staff.

Confusion Capital is the foundation supporting Reserve, and the Reserve protocol, which Reserve says functions as a currency board that may be used to create stablecoins among other functions.

Dem machinations

    • Rep. Bill Foster (D, IL), a past member of the Congressional Blockchain Caucus, was at a pro-crypto event last week – Tony Edward on X
    • Rep. Sean Casten (D, IL) offers a tweet thread on his crypto mixer bill – Rep. Casten on X
    • ‘I wanted to send a message’: Democrats break with Warren, Biden on crypto – Politico

ETH ETF rejection

    • This Week: “Fund Managers Brace for SEC Rejection of Ether-ETF Applications” – Bloomberg

Ryan Selkis

Was a Democrat, now a Republican: meet Ryan Selkis.

“How many of these people are there?” is the question Democratic leaders on the Hill are likely asking themselves.

An entrepreneur and crypto investor, Selkis has carved himself a lead role as critic of Democratic strategy when it comes to digital assets policy.

In the recent past, the Messari CEO had always been careful to publicly loop in local (New York) politicians to his company’s fall conference (e.g. last year: Sen. Kirsten Gillibrand (D, NY) and Rep. Ritchie Torres (D, NY)).

And his Dem sources appear to be as good as any media hound. Witness: his news on Sen. Schumer’s SAB 121 views on May 10.

And last October when Sen. Elizabeth Warren’s (D, MA) chief of staff was preparing to take over a policy position in the White House – Selkis knew. The tweet has since been deleted (but lives on here) and read: “Rumor is Jon Donenberg, Liz Warren’s [Chief of Staff], is heading to the White House to replace Bharat Ramamurti. Bharat was responsible for most of the admin’s deep crypto hostility. Some in DC told me to ‘wait & see’ Biden soften with Bharat gone. If Donenberg is in, that won’t happen.” Donenberg was, and still is, in.

Selkis is about as “Democratic insider” as they come among crypto entrepreneurs and yet he’s voting Trump and made an onstage appearance with the former President in Mar e Lago earlier this month. That’s likely shaken some key Dems such as Sen. Gillibrand.

To pour salt in the Democratic leadership wounds, Selkis hasn’t stopped tweeting at Democrats, “For my progressive policy friends in crypto: I will be going full tilt vs the White House and Senate Dems not named [Sen. Gillibrand] until after the election.” And, here’s another spicy one from Friday.

Selkis latest prediction is a “90%” likelihood that President Biden won’t veto the SAB 121 resolution. That’s a pretty bold take. If true, imagine the turnaround for the President after issuing a sharply-worded statement that he was going to veto H.J.Res.109? Humiliating. It will be interesting to see how mainstream media plays this.

What’s next? Selkis as Trump’s VP.

SEC departure

The Securities and Exchange Commission (SEC) announced that Policy Director Heather Slavkin Corzo is leaving the agency and will be replace by Corey Klemmer who has served as Corporation Finance Counsel to SEC Chair Gary Gensler. Read more.

Whether Democratic support in Congress of the resolution rescinding SAB 121 is causing a change in policy at the SEC – and Corzo’s departure is the first step – is difficult to ascertain. Time will tell.

If FIT 21 gets a surprising number of Democratic supporters in the House vote this week, more changes would appear possible as the “anti-crypto” faction of Dem leadership loses power.

still more tips

Opinion: The Clock Is Ticking for Democrats on Crypto – CCI and Paradigm on Fortune

The Night That Sotheby’s Was Crypto-Punked – The New York Times

Binance Gets Two Compliance Monitors in Settlements With U.S. Authorities – The Wall Street Journal

Pump dot Fun exploiter identified and arrested in London – Blockworks