Congress To Reintroduce Bill To Give CFTC More Oversight Over Crypto• May 5, 2022 2:48 pm • Comments
Congress is in the middle of reintroducing a new bill called the Digital Commodity Exchange Act which would give the CFTC more direct oversight over crypto exchanges and transactions.
This means that the CFTC may potentially take over some of the authority that the SEC is currently exercising on the spot crypto markets today.
The move is expected to be good news for the crypto community because many have previously criticized the SEC for over-regulation of the markets.
The bill comes from a bi-partisans set of law makers which include representatives Glenn Thompson (R-Pa.), Ro Khanna (D-Calif.) Tom Emmer (R-Minn.) and Darren Soto (D-Fla.)
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The Digital Commodity Exchange Act of 2022 (DCEA), introduced Thursday by representatives Glenn Thompson (R-Pa.), Ro Khanna (D-Calif.) Tom Emmer (R-Minn.) and Darren Soto (D-Fla.), would create a definition for “digital commodity” and allow the CFTC to oversee companies issuing or letting people trade these types of tokens, while having the Securities and Exchange Commission (SEC) continue to oversee tokens that fall under U.S. securities laws.
“The term ‘digital commodity’ means any form of fungible intangible personal property that can be exclusively possessed and transferred person to person without necessary reliance on an intermediary,” a copy of the bill said.
The definition would not include any equity or debt interests, or securities (defined as “a profit or revenue share derived solely from the managerial efforts of others” in the bill).
In other words, the SEC would continue to enjoy its own oversight over aspects of the crypto market.
Of course, the key thing to note here is that the SEC oversees all securities and the question that is present now is whether or not some digital assets are considered ‘securities’.
The blurred line on what is actually considered a security is exactly why the Ripple vs SEC case is so important for the rest of the crypto industry as it will be the standard going forward.
The new introduced bill is an update to the original bill which was proposed back in 2020 and has been something that was been worked on for many years.
Glenn Thompson, one of the members who introduced the bill, stated that the goal here is to finally figure out this regulatory puzzle once and for all in order to bring clarity to the crypto industry.
Bipartisan group of lawmakers in Congressional Blockchain Caucus backing CFTC in jurisdictional battle.
Crypto Bill in House Would Limit SEC’s Reach Over Exchanges https://t.co/llLg3EdXa6
— スーパーデイブ (@David_Jolly_DC) April 28, 2022
These digital commodities could only be sold on a CFTC-registered exchange, which would have to abide by certain requirements which include holding customers’ crypto in qualified custodians, safeguarding customer assets and prevent commingling customer and corporate funds, according to the bill.
“Closing the spot-market gap is an essential piece of the regulatory puzzle, but more work remains. I look forward to working with my colleagues to bring greater clarity to crypto users and creators and I hope to see it move through the legislative process promptly,” he said.
Khanna, a co-sponsor, said, “To foster American innovation and tech job growth, Congress must establish a clear process for creating and trading digital commodities that prioritizes consumer protections, transparency and accountability.”
Currently, the bill is still in the process of approval and is seen as necessary in order to prevent the SEC from having free reign over the crypto industry.
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— Ann S (@AnnS_2022) April 29, 2022
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