Republicans in the US House of Representatives revised a recent law following the XRP lawsuit. The new law gives the CFTC, another major US regulator, new powers for the judiciary.
US House revises law issued in June following XRP decision
Republican members introduced a new cryptocurrency surveillance bill on Thursday that aims to establish a regulatory framework to protect investors in the crypto industry. The law in question first appeared in June. After Judge Torres’ decision in favor of XRP, significant revisions to the market structure and stablecoin laws of the June draft took place.
The revised bill excludes a number of traditional securities from the “digital asset” category, which some say are bad for DeFi. However, it aims to create comprehensive rules for cryptocurrencies in general. The law in question came at a time when the US was aggressive towards cryptocurrencies.
The bill first appeared in June. As of Thursday, XRP received a few revisions shortly after its decision. One of them aims to establish a regulatory path for cryptocurrency exchanges to register with the SEC. It also aims to enable them to trade digital securities, commodities and stablecoins in one place.
New rules give both CFTC and SEC a seat at the table
House of Representatives Dusty Johnson said at this point, “The crypto industry wants clarity. Our joint design gives both the CFTC and the SEC a seat at the table. Our design continues to innovate for developers. Meanwhile, it sets clear principles to ensure financial security and certainty.”
Gabriel Shapiro, general counsel at Delphi Labs, noted a change in the June discussion draft that “completely alters the value proposition in the bill” and reaffirms the uncertainty it is trying to resolve. Accordingly, on Page 10, the revised bill excludes a number of traditional securities from the definition of “digital assets,” such as stocks, bonds, “transferable shares,” “certificates of participation in interest or any profit-sharing agreement.”
New DeFi projects may be redlisted
As a result, Shapiro wrote on Twitter that a number of coins available in the DeFi market, such as Compound’s cTokens or Liquid Collective’s Liquid Staking Tokens, “will be largely regulated under this provision, even if they are not under current law.” Shapiro, the SEC can still go the war route. All they have to do is make a token ‘transferable share’, ‘a dividend’ etc. It is to claim that it is,” he warns.
The SEC can still go on the warpath…all they have to do is argue that a token is a "transferable share" "a profit interest" etc.
XRP and such will be fine but DeFi can still be persecuted at will… actually the regulators will have expanded authority to do so…
— _gabrielShapir0 (@lex_node) July 20, 2023
The new version makes a few key changes after the XRP decision
The new law will allow exchanges and firms to submit a statement of intent to register with the SEC or CFTC. It will also include definitions of digital assets and decentralized assets under securities law and commodity laws. However, it requires the SEC and CFTC to “prepare additional guidance to facilitate the development of tokenized securities and derivatives. Additionally, it will force a collaborative effort to assess whether the rules are necessary.
Regulators will consider rules that affect the fairness of markets, public interest and investor protection.
If the bill is passed in the House, it will be up to the Democratic-led Senate to decide on the bill. Some Democrats, such as Maxine Waters, have expressed concern about the bill. Also, the SEC, led by Gary Gensler, has repeatedly said there is no need for new rules to define cryptocurrencies. But the Ripple and SEC decision shows that digital assets require new rules and definitions.
The crypto community reacted positively to the new law
“If we want to be taken seriously as a nation, we have to take it seriously as a nation,” said Paul Grewal, CLO of Coinbase. This legislation would finally bring the US into the global conversation about digital asset regulation. “Congress should enact this without delay.”
If we want to be taken seriously as a nation, we have to act seriously as a nation. This legislation would finally put the US into the global conversation on digital asset regulation. Congress should enact this without delay. https://t.co/zFkN87npMm
— paulgrewal.eth (@iampaulgrewal) July 20, 2023
Pro-XRP attorney John Deaton has suggested that some are still trying to attack crypto. He said he would save his opinion for this for later.
https://twitter.com/cryptorecruitr/status/1682183293750394880
Finally, Dan Gambardello stated that Cardano and DeFi attracted all the attention after the announcement. Crypto law is critical to ensure regulatory clarity and certainty for digital assets in the US. As Kriptokoin.com, we have included the developments from Canada in May in this article.
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