A new bipartisan bill is proposing crypto regulations fall under the purview of the Commodity Futures Trading Commission (CFTC) instead of the U.S. Securities and Exchange Commission (SEC).
The Lummis Bill, sponsored by US Senators Cynthia M. Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.), aims to be the first serious attempt at bringing regulatory clarity to the crypto industry.
Though SEC head Gary Gensler has argued most crypto assets are securities, Lummis and Gillibrand’s bill asserts that “most digital assets are much more similar to commodities than securities.”
The CFTC, which only has one-sixth the budget of the SEC, already oversees Bitcoin (BTC) and Ethereum (ETH) futures trading in the US. The new bill would grant the regulator broader authority in the space and provide a process for crypto exchanges to register with the CFTC.
Says Senator Lummis in a prepared statement,
“The United States is the global financial leader, and to ensure the next generation of Americans enjoys greater opportunity, it is critical to integrate digital assets into existing law and to harness the efficiency and transparency of this asset class while addressing risk.”
Though the new bill is being welcomed by many, others are more critical.
Says Todd Phillips, director of financial regulation and corporate governance at the liberal think tank Center for American Progress,
“The status quo would be better than this bill.
So many of these tokens are securities and need to comply with the regular, usual securities laws, and this bill tries to create a special crypto-specific disclosure regime that I don’t think discloses all the information investors need to fully evaluate whether to purchase a security.”
Crypto legal expert Jeremy Hogan, known for his coverage of the SEC’s lawsuit with Ripple Labs, argues the bill is much better than current regulations.
“Lummis Bill thoughts:
- The bill is strikingly broad. Reporting, taxes, brokers, etc. are all under its umbrella.
- It’s MUCH better than status quo.
- It carves a niche for digital assets that are subject to SEC oversight if they are “investment contracts.” BUT…
Even IF a digital asset falls under SEC oversight, the reporting requirements aren’t onerous. AT LEAST it’s possible that a crypto company could fulfill the reporting requirements (unlike now). In summary, I like it. It tries and mainly strikes a nice balance. [In my opinion].”
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