A new draft of cryptocurrency legislation has emerged in the US. This outline focuses on defining what constitutes a security versus a commodity. This caused the bill to garner support among cryptocurrency advocates. Because the law aims to divide the powers of the two major US regulators, the SEC and the CFTC. Here are the details…
Cryptocurrency bill drew attention in the USA
Republican lawmakers met on Friday in the U.S. House of Representatives Financial Services Committee and the House Agriculture Committee over a draft discussion on regulating cryptoassets. Legislation dictates when an asset is considered a security. Therefore, it is seeking clarity that it will be regulated by the US Securities and Exchange Commission (SEC). On the other hand, it creates a process for how crypto assets are handled and how brokers can register with the SEC or Commodity Futures Trading Commission.
If the bill is passed, powers will be shared between the SEC and the CFTC. The bill, penned by Representatives Patrick McHenry and Glenn Thompson, aims to empower the CFTC to oversee the spot market for crypto-commodities under current law. The SEC will be responsible for regulating crypto assets such as investment contracts. Paul Grewal, Coinbase’s Chief Legal Officer, used the following statements in his tweet, as we reported as Kriptokoin.com:
I was particularly encouraged by the authors’ emphasis on the discussion of what constitutes a security and a commodity. I hope these definitions can settle this long debate for the last time for everyone.
Jurisdiction becomes clear
The bill specifically establishes a framework that would give the CFTC jurisdiction over crypto-commodities. On the other hand, it clarifies the SEC’s jurisdiction over “crypto-assets offered as part of an investment contract.” The legislation also establishes a framework for when certain assets will become decentralized and thus become a commodity under the CFTC and will no longer be under the jurisdiction of the SEC. But according to some, the SEC may object to it. The head of government of the Crypto Council, Brett Quick, tweeted that seeing the text of the bill encouraged him. Quick said:
Providing clarity and transparency about when a crypto-asset becomes a security or commodity is critical. Defining the respective roles of the SEC and the CFTC is an important step.
Senior policy officials have said they hope to meet with California Representative Maxine Waters, who holds the House of Representatives Financial Services Chair on the legislation. Officials also said the draft of the debate was not shared prior to the announcement with Democrats on Friday. The House of Representatives Agriculture Committee will talk about cryptoassets next week. The committee plans to hold a session titled “The Future of Digital Assets”. Grewal of Coinbase said he will testify at this session.
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