PANews reported on May 22 that according to The Block, Gary Gensler, Chairman of the U.S. Securities and Exchange Commission (SEC), publicly expressed his objection to the 21st Century Financial Innovation and Technology Act (FIT21 Act) in a statement released on Wednesday. Gensler said in the statement: "FIT21 will create new regulatory gaps and undermine decades of precedents on investment contract regulation, exposing investors and capital markets to immeasurable risks." The SEC Chairman's main argument focused on his belief that the HR 4763 Act undermines the classification of crypto assets as investment contracts, which will take them out of the SEC's supervision and hinder investor protection efforts.

Gensler believes that FIT21 could allow cryptocurrency companies to self-certify that their cryptocurrency investments and products are “decentralized” and fall into a “special category” of “digital commodities,” thereby avoiding SEC scrutiny. Gensler said the agency’s ability to challenge these self-certifications would be limited by resource constraints, which could result in the vast majority of the cryptocurrency market being unregulated.

Gensler also said the bill excludes cryptocurrency trading platforms from the definition of an exchange and repeals historically tested frameworks such as the Howey Test, which will ultimately put investors at risk.