A new bipartisan initiative proposes that crypto laws be handled by the Commodity Futures Trading Commission (CFTC) rather than the Securities and Exchange Commission of the United States (SEC).
Senators Cynthia M. Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.) have introduced the Lummis Bill, which promises to be the first real attempt to offer regulatory clarity to the crypto business.
The bill classifies digital currencies as “ancillary assets,” or intangible, fungible assets that are offered or sold in conjunction with the purchase and sale of a security, with a few exceptions. Under US law, the ancillary assets would be classified as commodities and fall under the CFTC’s control.
What you should know
- The Securities and Exchange Commission will not recognize cryptocurrency and other digital coins as traditional securities unless the holder is provided to the same benefits as corporate investors, such as dividends, liquidation rights, or a financial interest in the issuer, according to the officials.
- The CFTC already regulates Bitcoin (BTC) and Ethereum (ETH) futures trading in the United States, despite having a budget of only one-sixth that of the SEC. The proposed law would give the CFTC more jurisdiction in the area and create a registration process for cryptocurrency exchanges.
- In a prepared statement, Senator Lummis says, “The United States is the world’s financial leader, and integrating digital assets is vital to ensuring that the next generation of Americans has more opportunities.”
- While many people applaud the new bill, others are less enthusiastic. Pundits argue that many of these tokens are securities that must adhere to standard securities laws and that this bill attempts to create a special crypto-specific disclosure regime that, in their opinion, does not provide all of the details investors require to fully evaluate whether to purchase a security.
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