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In a move signaling a more structured approach to the burgeoning crypto industry, US House Republicans unveiled a fresh legislative proposal on Thursday that establishes swimlanes between the Commodity Futures Trading Commission and the US Securities and Exchange Commission (SEC). <\/p>\n
At 212 pages, theFinancial Innovation and Technology for the 21st Century Act<\/a>is designed to provide a clear regulatory landscape for digital assets, introducing fresh definitions, highlighting digital asset exemptions, and charts a course for intermediaries in the digital asset space (eg, crypto exchanges) to go about registering with the CFTC and SEC.<\/p>\n To that effect, the new bill establishes joint rulemaking authority between the two regulatory agencies, granting the CFTC the power to control and oversee the digital commodities market, which includes exchanges and broker-dealers.<\/p>\n As for the SEC’S authority, the bill proposes amendments to existing US securities laws, whereby the SEC would be required to factor in \u201cinnovation\u201d when formulating new regulations. In other words, digital commodities like Bitcoin and certain stablecoins used for payments would be exempt from being classified as “securities.”<\/p>\n The bill also delineates the SEC’s jurisdiction over payment stablecoins, particularly when they are utilized on platforms registered with the SEC. However, it stops short of granting the regulatory body any oversight concerning the design, structure, or operational aspects of these stablecoins.<\/p>\n Companies aspiring to register as broker-dealers or alternative trading systems with the SEC, specifically for functioning as digital asset intermediaries, would be subject to thorough inspections by the regulatory agency.<\/p>\n Rep. Glenn \u201cGT\u201d Thompson (R-Pa.), Chairman of the House Committee on Agriculture, emphasized the importance of the bill in a recent statements<\/a>, <\/p>\n \u201cOver the past several months, our teams solicited extensive feedback from stakeholder and market participants and worked diligently to produce a legislative product that aims to close existing authority gaps, ensuring US leadership in financial and technological innovation,\u201d Thompson said on Thursday. <\/p>\n Dusty Johnson (RS.D.) also expressed the industry’s yearning for a clear regulatory stance. \u201cThe crypto industry wants clarity, and our collaborative bill gives both the CFTC and SEC a seat at the table. Our bill establishes clear principles to ensure financial security and certainty as blockchain technology continues to innovate.\u201d<\/p>\n This move comes amid growing concerns within the crypto community regarding the perceived regulatory ambiguity in the US. Such uncertainties, coupled with a series of assertive enforcement measures by the US Securities and Exchange Commission (SEC), have prompted well-established crypto enterprises to contemplate relocating<\/a> Moreover, this unclear regulatory environment has also discouraged potential startups from setting up shop in the country.<\/p>\n The bill has not been without its critics. Gabriel Shapiro, the chief legal officer at Delphi Labs, pointed out<\/a> a significant modification from the bill’s june draft<\/a> via Twitter. He observed that the updated version of the bill has excluded a variety of conventional securities, such as stocks and bonds, from the “digital assets” definition. This also encompasses “transferable shares” and “certificates of interest” in profit-sharing agreements, among others.<\/p>\n Shapiro expressed concerns over the implications of this change, especially for the decentralized finance (DeFi) sector. He mentioned that certain assets prevalent in the DeFi space, like Compound’s cTokens or Liquid Collective’s Liquid Staking Tokens, might face stringent regulations under the new provisions, even if they weren’t subject to such regulations previously.<\/p>\nThe bill in detail<\/h2>\n
Criticism and concerns<\/h2>\n