House Republicans Unveil Revised Crypto Market Bill Aiming to Curb Big Firm Dominance

Championed by House Agriculture Committee Chair Glenn Thompson and Financial Services Subcommittee Chair French Hill, the updated proposal is described by Paradigm’s Vice President of Regulatory Affairs, Justin Slaughter, as a “meaningful rewrite” of the earlier Financial Innovation and Technology for the 21st Century Act (FIT21).

A key draft feature is a stricter definition of an “affiliated person” in a blockchain project, reducing the ownership threshold from 5% to just 1%. Slaughter explained this change as a move to check the dominance of large crypto entities and encourage wider market participation.

“This is emblematic of the bill’s direction,” he noted in a post on X,  “It’s a direct push against the criticism that crypto is monopolized by a handful of powerful players.”

The bill aims to modernize crypto regulation by introducing new definitions. It defines a “mature blockchain system” as decentralized and places the SEC as the primary authority over crypto networks until they reach this status. DeFi protocols enabling self-directed transactions are exempt from registration as digital commodity brokers. The draft also introduces the term “investment contract assets” to differentiate digital assets from traditional securities, moving away from the Howey Test standard. Securities laws only apply if a token’s secondary sale grants ownership or profit from the underlying business.

The proposed legislation also provides a dual regulatory path: crypto firms could raise capital under the SEC’s oversight while gaining a clear route to register digital commodities with the Commodity Futures Trading Commission (CFTC).

Meanwhile, Jimmy Patronis and Randy Fine, two Republican candidates who received substantial backing from the crypto industry’s political action committee (PAC), Fairshake, have secured seats in the U.S. House of Representatives following special elections in Florida. 

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