senator debbie stabenow supports crypto bill cftc

The Commodities and Futures Trading Commission (CFTC) continues to emerge as the most viable alternative when it comes to determining which agency will be in charge of overseeing the crypto market in the United States.

However, there is still an ongoing debate in regards to how these assets are classified and the extent to which the CFTC will be able to intervene in certain cases, especially after the country’s top financial watchdog, the Securities and Exchange Commission (SEC) unilaterally defined some crypto assets as securities in an insider trading proceeding.

Just yesterday, US Senators Debbie Stabenow (D) and John Boozman (R) introduced a bipartisan bill called the Digital Commodities Consumer Protection Act, which is intended to give the CFTC more authority over these digital assets so they can be regulated properly.

“Digital assets and blockchain technology have already, and will continue, to change the way global markets function. Yet, this fast-growing industry is currently governed largely by a patchwork of regulations at the state level. That simply is not an effective way to protect consumers from fraud”, Senator Boozman stated in the official press release that revealed the legislative initiative.

In addition, the CFTC will also be granted authority to regulate the market’s critical infrastructure including trading facilities, brokers, dealers, and custodians of digital commodities.

The Senators backing this project are the leaders of the legislative body’s Agriculture Committee, meaning that they have extensive experience when it comes to regulating commodity-like assets.

New Bill Introduces the Term “Digital Commodity”

In the section-by-section run-down of the bill, Bitcoin (BTC) and Ethereum (ETH) are defined as outright digital commodities. However, the bill’s definition of a “digital commodity” does not extend to digital assets classified as securities.

There appears to be a consensus when it comes to treating BTC and ETH as commodities. However, the latest decision from the SEC to categorize nine digital assets as securities has sparked debate as to what the agency’s criteria is to decide what is what.

However, even though this bipartisan bill gives the CFTC plenty of authority to regulate the crypto spot market in the US, it does little to establish a clear definition of which assets would be treated as commodities and which will fall under the category of securities.

Instead, it gives the SEC, and ultimately the courts, to classify the instruments. The agency led by Gary Gensler has not yet created specific rules that could help organizations easily define crypto assets.

Crypto Community Welcomes This New Piece of Legislation

The crypto community has endorsed this new bill as reflected by the opinions of Sam Bankman-Fried, the founder and CEO of FTX, a crypto derivatives exchange, who said he was “really excited” about the bill. SBF, as he is also known, emphasized that he thought it was “constructive and healthy” to register his firm under this regime.

In addition, the head of policy for the Blockchain Association, Jake Chervinsky, also commented that this was a “good bill overall” and emphasized that it affirms the “growing consensus” that the CFTC is the right agency to oversee the industry.

Both industry specialists and companies within the space have advocated for the creation of these rules to protect themselves from listing and transacting with securities they are not authorized to offer to the public.

Coinbase, the popular US-based crypto exchange, recently categorize the SEC’s decision to unilaterally classify some digital assets as securities as an “unfortunate distraction” from what they consider to be “appropriate law enforcement action”.

The reason for this is that the SEC did not disclose the process they followed to arrive at such conclusions and this complicates the picture for crypto exchanges and other similar entities as there might be assets in their platforms that, under the agency’s definition, are considered securities without them knowing.

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