SEC Chairman Gary Gensler has publicly opposed FIT21.

SEC Chairman Gary Gensler publicly opposed FIT21 on May 22, saying it creates “new regulatory gaps” and endangers the stability of capital markets. Its passage in the House of Representatives has been seen by many as an early victory for crypto.

Coinbase CEO Brian Armstrong described the bill's passage, along with the support of 71 Democratic Party members as a “total victory” and a victory for “clear crypto regulations.”

“That's a large number of elected Democrats voting 'no confidence' in the SEC right now,” said Variant Fund chief legal officer Jake Chervinsky.

However, crypto-focused attorney Gabriel Shapiro pushed back against the celebration, arguing to X that FIT21 would still give the SEC “immense power.”

“This provides a dual regulatory regime, shared between the SEC and the CFTC,” he added. “This is done by giving the CFTC authority it has never had – the authority to regulate spot commodity markets.”

FIT21 largely cedes control of crypto to the Commodity Futures Trading Commission, considered by the industry to be a looser regulator than its securities regulatory counterpart.

The SEC, however, will have regulatory powers over cryptocurrencies that are not sufficiently decentralized but FIT21 will also create an avenue for cryptocurrencies that are considered securities to be sold as commodities.