United States Senate Agriculture Committee chair Debbie Stabenow and rating member John Boozman launched the Digital Commodities Consumer Protection Act bill on Wednesday. The bill has been anticipated for a number of months. Like the Digital Commodities Exchange Act (DCEA) launched into the House of Representatives by members of the House Agriculture Committee in April, the brand new bill enlarges the position of the Commodity Futures Trading Commission (CFTC). The new bill just isn’t the companion to the DCEA, nonetheless.
According to the abstract, the bill’s definition of digital commodities “includes Bitcoin and Ether and excludes certain financial instruments including securities,” that are regulated by the Securities and Exchange Commission (SEC). The bill mandates registration by the CFTC of a broad spectrum of market gamers, reminiscent of “digital commodity broker,” “digital commodity custodian,” “digital commodity dealer” and “digital commodity trading facility,” that are collectively understood to be “digital commodity platforms.” Digital commodity platforms could possibly be cross-registered with the SEC beneath the bill.
In addition, the bill would require the registration of “associated persons of digital commodity brokers and digital commodity dealers.”
The bill was met with vast approval inside the crypto group, primarily on Twitter. Blockchain Association coverage head Jake Chervinsky known as it “a good bill overall & confirms a growing consensus for CFTC regulation.” Coinbase chief coverage workplace Faryar Shirzad mentioned he was “really pleased to see the introduction” of the bill.
1) I’m actually excited to see @SenStabenow and @JohnBoozman introduce a robust bill to carry buyer safety and federal oversight to crypto.https://t.co/AJAWjOHgDy
— SBF (@SBF_FTX) August 3, 2022
CFTC chair Rostin Behnam launched a press release saying “new legislative authority is needed to clarify ambiguities and provide a regulatory framework to the digital commodity market.”
The normal accolades weren’t with out notes of warning. Coin Center launched a weblog put up expressing gratitude for the “careful approach to developing this legislation” however cautioned:
“We have reservations about the breadth of definitions for regulated activities and we believe there is a need for a clearer exemption of persons engaged in constitutionally protected activities such as publishing software.”
The DCEA additionally addressed digital commodity registration however left it as much as the platforms to register with the CFTC or stay topic to state registration.
Patrick Daugherty, head of the digital belongings observe at Foley & Lardner and adjunct professor of Cornell Law School, advised Cointelegraph in an e mail, “The legislation […] does not make clear that digital assets (other than Bitcoin and Ether) are not securities and are therefore covered by the DCCPA. It is therefore open to the SEC under its current leadership to continue to assert that virtually every digital asset is a security, which would be unfortunate.”
Daugherty additionally noticed: “It is not clear to me that decentralized exchanges are, or are not, intended to be covered by this legislation. The platforms that are covered must be operated by “persons,” but DEXes have no personnel.”
Related: US crypto regulation bill goals to carry higher readability to DAOs
The bill enters an already crowded area, becoming a member of the DCEA and the more moderen Lummis-Gillibrand Responsible Financial Innovation Act, which was launched in June. Both payments give the CFTC a bigger position in digital asset regulation. Notably, the DCEA and the current bill originate within the congressional agriculture committees, that are the our bodies with supervisory powers over the CFTC.
It is thought that Representative Maxine Waters, chair of the House Financial Services Committee, and Representative Patrick McHenry, the committee’s rating member, are additionally engaged on crypto-focused laws. Since the Financial Services Committee shares oversight of the SEC with the Senate Banking Committee, the Waters-McHenry bill is anticipated to be extra favorable to the SEC.
The Digital Commodities Consumer Protection Act bill will undoubtedly undergo revisions as it’s thought of in Congress. It is unlikely to return up for a vote within the present Congress on account of scheduling points.