A leaked copy of the new bipartisan Senate bill appears to favor a much tighter regulatory environment for cryptocurrency assets.
What Happened: A June 3 Barrons report details a revised bill put forward by Senators Cynthia Lummis and Kirsten Gillibrand.
The oversight of the cryptocurrency industry would be split between two U.S. regulators: the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).
After incorporating industry feedback, the new version of the bill broadens the definition of tokens under the SEC’s jurisdiction, but only courts will be able to make exceptions to the presumption that a token is a security.
The Fine Print: “The bill clarifies the universe of digital tokens that would fall under the SEC’s jurisdiction. The latest draft restricts the SEC’s authority instead of expanding it,” said a spokesperson for Lummis to Barrons.
The CFTC would oversee trading in spot markets. The draft bill also puts forth recommendations for enhanced decentralized finance (DeFi) and decentralized autonomous organization (DAO) regulation.
It broadly classifies fungible tokens as securities while making a case for non fungible tokens (NFTs) to be an entirely new asset class.
Online reactions: The crypto community weighed in on the leaked copy of the draft bill as it began making the rounds on social media.
Big takeaways on this. Regulated Exchanges, Fungible Tokens are Securities, NFTs are a new class of asset, Stable coins must back 100% of their value in the currency they are stabilized by, DeFi regulation incoming in 1 year, US committee for the digital dollar.— Leyens (@Leyens_OS) June 7, 2022
In fact, the language of the bill is so broad, that people could start a whole business of mining/staking crypto assets, hold them until death (and in the meantime borrow/short them against the box), and never ever pay tax on them.— Omri Marian (@Omri_Marian) June 6, 2022
looks like the new US crypto bill that has been leaked goes hard after shit tokens, DAOs, DeFi, stablecoins, and exchanges pic.twitter.com/wjcAUSi3RS— Shibetoshi Nakamoto (@BillyM2k) June 7, 2022
yeah most “projects” make no attempt to be complaint since they’re not legit in the first place— Shibetoshi Nakamoto (@BillyM2k) June 7, 2022
The SEC had previously ruled that Bitcoin BTC/USD and Ethereum ETH/USD are not securities but has brought enforcement actions for alleged “unregistered securities offerings” to XRP XRP/USD issuer Ripple, and more recently, Binance for its native token Binance Coin BNB/USD.
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