The rules, proposed by Senate Agriculture Committee Chair Debbie Stabenow and senior Republican member John Boozman, would authorize the Commodity Futures Trading Commission to be the default regulator for cryptocurrencies. This would be contrary to bills proposed by other members of Congress and consumer advocates who have proposed granting powers Security and Exchange Commission.
The CFTC has historically been underfunded and much less of a regulator than SPK, which has armies of investigators who investigate potential wrongdoing. The bill attempts to address these issues by charging users of the crypto industry, which in turn will fund stricter oversight of the industry by the CFTC.
“Our account will
CFTC with exclusive jurisdiction over the spot market for digital goods, which will result in additional safeguards for consumers, market integrity, and innovation in the digital goods space,” Buzman said in a statement.
Sens. Corey Booker, DN.J., and John Thune, RS.D., are co-sponsors of the bill.
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“It is very important that the (CFTC) have the proper tools to regulate this growing market,” Thune said.
This year, crypto investors have seen prices plummet and companies fail, fortunes and jobs disappear overnight. Federal regulators allege that some firms engage in illegal securities exchanges. Bitcoin, the largest digital asset, is trading well below its all-time high, from over $68,000 in November 2021 to around $23,000 on Wednesday.
Industry leaders have dubbed this period the “crypto winter.”
The latest legislative proposal may be added to the list of proposals received from Congress this year.
Sen. Pat Toomey, of Pennsylvania, introduced legislation in April called TRUST stablecoin law, this will create the basis for regulating stablecoins, which have suffered huge losses this year. Stablecoins are a type cryptocurrency are pegged to a specific value, usually the US dollar, another currency, or gold.
In addition, in June Sens. Kirsten Gillibrand, DN.Y., and Cynthia Lummis, R-Wyo., have proposed a sweeping bill called the Responsible Financial Innovation Act. This bill proposed legal definitions for digital assets and virtual currencies; require the IRS to adopt guidelines for merchant acceptance of digital assets and charitable contributions; and will distinguish between digital assets that are commodities and those that are securities, which has not been done.
Along with the Toomey legislation and the Lummis-Gillibrand legislation, the proposal is being developed in the House Financial Services Committee, although those negotiations stalled.
Committee Chair Maxine Waters, D-Calif., said last month that while she, senior GOP member Patrick McHenry of North Carolina and Treasury Secretary Janet Yellen have made significant progress toward reaching an agreement on legislation, “we, unfortunately, have not yet reached this, and therefore we will continue our talks on the August break.”
President Joe Biden’s Financial Markets Working Group released a report last November urging Congress to pass legislation to regulate stablecoins, and Biden issued an executive order earlier this year urging various agencies to consider ways to regulate digital assets.