US Senators Introduce Bill To Establish Crypto Regulatory Framework

By Kevin • July 12, 2023 11:01 pm • Comments

It was just revealed that United States Senators Cynthia Lummis and Kirsten Gillibrand are introducing new legislation to attempt to establish a regulatory framework for crypto.

This is not the first time that such a proposal was made, but it seems that the reintroduction of such legislation means that there is still a strong push for it.

This legislation will be aimed at confirming what exactly is the role of the SEC and the CFTC when it comes to regulating the digital assets industry.

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As of right now, the roles are still not completely defined which is causing a lot of uncertainty for crypto investors and businesses.

CoinTelegraph reports:

The Lummis-Gillibrand bill was first introduced in June 2022 amid the crypto market crash that resulted in the bankruptcies of several high-profile firms and the price of many tokens plummeting.

According to the fact sheet provided by Lummis, the updated legislation will include updates to the U.S. tax code allowing the industry “to fund its own oversight,” as well as guardrails “to prevent another FTX-style event from occurring” — the crypto exchange collapsed in November 2022 after the bill was introduced.

Lummis’ and Gillibrand’s bill was drafted after the collapse of Terraform Labs, the South Korea-based firm that saw its algorithmic stablecoin depeg from the U.S. dollar.

As a result, the legislation will also require payment stablecoins to be issued only by depository institutions.

This new bill will supposedly receive bipartisan support, but whether or not it will actually pass is still to be determined.

On the other hand, there are other Senators such as Sen. Elizabeth Warren who are highly against the digital assets industry.

The political landscape, as a result, seems to be highly split and divided when it comes to opinions on crypto with one side being heavily in favor and the other against.

Due to this, it is possible that it will take some time for things to progress in either direction.

The upcoming presidential election also has multiple candidates that have taken a strong position on the matter and the result of that could determine which side the government will move towards.

DeCrypto.co concludes:

“Bipartisan legislation is the best path forward for regulatory clarity, consumer protections, and market structure reform in the digital asset ecosystem,” she said.

Gabriel Shapiro, the general counsel for Delphi Labs, struck a more lukewarm tone on Twitter.

While acknowledging that the text of the bill has not emerged yet to judge, it appeared “too deferential” to existing securities laws and expressed caution over other aspects that he warned could lead to confusion.

“I am worried what feedback they took from SEC and suspect that feedback will likely increase gray area by deferring to existing Howey test standard rather than rewriting the securities laws to cover certain tokens sensibly,” tweeted Shapiro.

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