A bill that will give the US regulator CFTC more power over the cryptocurrency market has been approved. The bill, passed on July 26, contains specific articles for the NFT and DeFi sectors.
“Digital Asset Market Structure and Investor Protection Law” approved
A key congressional committee on Wednesday introduced bill aimed at developing the regulatory framework for cryptocurrencies. The bill received support from both the Democratic and Republican parties. It was accepted by a vote of 15 to 35.
The bill, passed by the House Financial Services Committee, gives more powers to another major regulator, the Commodity Futures Trading Commission (CFTC), along with the SEC. With the bill, the CFTC will be able to define a cryptocurrency as a security or commodity. In addition, the SEC’s jurisdiction is expanding.
Meanwhile, the bill has drawn criticism from some councilors. “I have been on this committee for 20 years,” Massachusetts representative Stephen Lynch said on Wednesday. “I can say with absolute certainty that this is the worst law ever presented for price hikes in the last 20 years,” he said.
Still, the chairman of the committee, Representative Patrick McHenry, praised the law in his keynote address. He said it’s the first time a committee has passed crypto-specific legislation. He also stated that the law confirms that it is necessary to prevent the US from “falling behind” other countries in regulating crypto.
Here are the key points of the bill
The bill first appeared in June. It was officially introduced on July 21. The 212-page bill aims to adapt the current market structure for securities and derivatives to cryptocurrencies and create a path for registration with the SEC or CFTC.
A memo accompanying the bill suggests that 70% of cryptocurrencies are commodities. He also states that the CFTC is the primary regulator over the cryptocurrency market. The CFTC will also have full jurisdiction over the crypto spot markets. The law in question also maps a new path for NFT and DeFi sectors.
Democrats reject additional powers given to CFTC
Democratic party members specifically object to the bill’s transfer of most authority over cryptocurrencies to the CFTC. Committee Republicans also opposed the Agriculture committee’s $120 million funding for the CFTC. CFTC chairman Rostin Behnam had requested $120 million over the next three years for the regulator to meet the extra crypto-related obligations. But Democrats noted on Wednesday that there are no guarantees that the Treasury will provide that funding.
Republicans hopeful that SEC’s aggressive crypto sanctions will stop
Republican lawmakers say the market structure bill will provide clarity to crypto players. They are also hopeful that the SEC will stop aggressive industry pressure. Member of Parliament Tom Emmer said that the European Union and the UK are also moving to pass their own specific legal frameworks for crypto. The SEC has moved away from being a moderate regulator with its latest moves in 2023.
According to Emmer, “The United States will miss a great opportunity if Congress does nothing. What would the internet look like today if it was designed by the Chinese Communist Party? We have the opportunity to lead globally in designing the future digital economy powered by cryptocurrencies advancing American privacy, individual sovereignty and free market values.”
In this article, we, as Kriptokoin.com, have included other US draft laws that are expected to pass in the coming periods.
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