A new bill is being proposed in the United States Senate that would also give the Commodity Futures Trading Commission (CFTC) more regulatory authority to oversee crypto markets.
Senate Agriculture Committee Chair Democrat Debbie Stabenow from Michigan and Republican Senator John Boozman from Arkansas hope to set a national regulatory standard for cryptocurrencies with the bill. It would amend the definition of a commodity to include “digital commodity.” This would apply to many cryptocurrencies including Bitcoin and Ethereum, effectively giving the CFTC jurisdiction over the industry.
The bill would also introduce similar new categories, such as digital commodity brokers, digital commodity custodians, and digital commodity dealers, who would all be required to register with the authority. “We are closing regulatory gaps and requiring that these markets operate under straightforward rules that protect customers and keep our financial system safe,” Senator Stabenow said in a statement.
Naturally, all crypto trading platforms would be required to register with CFTC as well, which would then be held to the same standard as traditional commodities brokers. In addition to protecting investors from abuse, exchanges would be required to monitor crypto trading and publish the data in a timely manner.
All crypto brokers and dealers would have to keep records of all digital commodity transactions, as well as provide information to the Commission upon request. Consumers should be offered fair prices and protected by providing safeguards against cyberattacks and creating risk management systems as well. Crypto trading platforms would also have to disclose conflicts of interest and make sure investors are aware of the risk involved in trading cryptocurrencies.
Second crypto bill
This would be the second piece of legislation introduced into the US Senate seeking to provide a regulatory framework for cryptocurrencies through empowering the CFTC. Democratic Senator Kirsten Gillibrand from New York and Republican Senator Cynthia Lummis from Wyoming introduced the Responsible Financial Innovation Act in June.
In addition to establishing the CFTC as the primary regulator for cryptocurrencies, it would also define how to determine their classification as a commodity or security based on their use, as well as including consumer protections and tax details.