Republican lawmakers distinguish crypto commodities and securities in draft bill
Republican congressmen presented a draft bill. June 2 This aims to clarify the role of regulators in the cryptocurrency industry.
SEC capabilities
The bill specifically aims to separate the regulation of virtual currencies as securities from the regulation of virtual currencies as commodities.
The proposed rule would prevent the U.S. Securities and Exchange Commission (SEC) from treating payment stablecoins and digital products as securities.
The rule would prevent the SEC from denying exemptions to certain trading platforms simply because they offer digital assets. “Ancillary activities” such as providing wallets, publishing software, and operating nodes are exempt from SEC regulation.
The SEC will also be required to change and update its rules on customer protection, record keeping, and digital assets in general.
Nonetheless, the rule would give the SEC anti-fraud authority over some transactions involving cryptocurrencies. Parties that are registered with the SEC but offer spot and spot markets must be registered with both the CFTC and the SEC.
CFTC authorities
Conversely, the proposed rule would give the Commodity Futures Trading Commission (CFTC) new powers over the physical and spot markets for digital commodities.
The CFTC will gain authority over transactions involving payment stablecoins and digital commodities on platforms registered with the CFTC. However, the CFTC has no control over the design and operation of these stablecoins.
The bill sets out requirements for digital commodity exchanges to register with the CFTC and a process by which services can determine which assets are eligible to trade on the registered platform. Also, while the CFTC is permitted to set requirements for digital asset custodians, the CFTC cannot directly regulate these custodians.
The proposal also includes establishing a joint advisory board between the CFTC and the SEC, creating other regulatory bodies, and conducting initiatives and studies.
Cryptographic innovation
Rep. Patrick McHenry, who promoted the bill, said the draft was “a step toward clear road rules.” He added that the bill aims to strike a balance between “protecting consumers and promoting responsible innovation.”
The bill represents a joint effort between the House Financial Services Committee, chaired by McHenry himself, and the House Agriculture Committee, chaired by Rep. Glenn Thompson. Representatives French Hill and Dusty Johnson also support the bill.
The bill is related to several regulatory discussions in recent months, including the extension of exchange rules to non-exchange services, changes to custodian requirements, and the different regulatory roles of the CFTC and SEC. ing.
The bill is in its early stages and has yet to receive feedback from Democratic lawmakers.
