On the 7th of June, two Senators passed a bipartisan bill for crypto regulation. This new bill aims to regulate the crypto space in the United States.
New Crypto Bill Regard Crypto As Commodities
The Lummis proposal, sponsored by Senators Kirsten Gillibrand and Cynthia M. Lummis, is the first attempt to bring clear regulations to the cryptocurrency sector.
However, a section of the bill connotes that digital currencies will fall under commodities. Before now, there have been various debates as to whether cryptos were securities or commodities.
However, the SEC (Securities Exchange Commission) has stated in the past that most cryptos were securities. This is the opinion of the current head of the SEC, Gary Gensler. Unfortunately, the crypto bill says otherwise. Both senators assert they have more similarities to commodities and not securities.
In addition, classifying cryptos as commodities will put them under the regulation of the CFTC (Commodity Futures Trading Commission). Presently, the CFTC receives only one-sixth of the budget given to the SEC. Moreover, the commodities agency oversees the future trading of BTC and ETH.
With the new proposal, the regulations will have more power in the crypto space. It will also provide the guidelines for crypto firms to register their platform.
According to Senator Lummis,
“The US is a global financial leader. It will do everything to ensure that the upcoming generation enjoy new technologies. As a result, integration of digital assets in its financial system is paramount.” Also, signing the bill into law will help bring more clarity to the sector, she added. Lummis believes clear regulations will address the issue of risk.
Crypto Bill Receive Criticism
Although several officials have welcomed the bill, there has been some criticism. Among them is Todd Phillips, a financial director. He noted that most tokens are under securities and not commodities. Philips believes the bill is not comprehensive to guide investors. According to him, most tokens behave like securities and should be under the SEC.
Meanwhile, Jeremy Hogan, a legal crypto expert, supports the bill. Hogan covered a large portion of the ongoing crisis between Ripple Labs and SEC. The legal expert believes the bill is better compared to current regulations.
As per reports, the crypto bill is broad and covers various areas of the crypto sector. Areas covered include crypto taxes, ICOs, registration of crypto firms, and much more. Presently, the bipartisan bill has not been signed into law.