A staff member of U.S. Senator Cynthia Lummis believes that if the matter cannot be resolved internally, the U.S. Congress will have to step in and address the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) disputes over who will regulate cryptocurrencies.
This question originated in 2014 Commodity Futures Trading Commission First assertion of jurisdiction over virtual currencies.Later, the U.S. Federal Court 2018, which states that the CFTC has the power to prosecute criminals in cases of fraud involving virtual currencies. To date, however, the SEC has been primarily investigating U.S.-based cryptocurrency exchanges and cryptoassets.
On August 3, Senators Debbie Stabenow (Michigan) and John Boozman (Arkansas) introduced the Digital Goods Consumer Protection Act of 2022 (DCCPA). If the bill is passed into law by the U.S. legislature, the CFTC would be given the power to regulate digital goods.
Most notably, the CDCPA classifies both bitcoin (BTC) and ether (ETH) as digital commodities rather than securities. This is especially important because SEC Chairman Gary Gensler recently stated in an interview with CNBC that BTC is the only cryptocurrency he would like to label as a commodity:
“Some, like bitcoin — that’s the only one I’m going to say because I’m not going to talk about any of these tokens, but my ex and others say they’re a commodity.”
But despite the nervousness, Lummis staff sees less than a 50 percent chance of CDCPA passing this year:
“The only way these two bills will get passed this year is if a catastrophic black swan event, such as the collapse of a major U.S. exchange, can bring lawmakers together.”
The news comes after the SEC started investigation Coinbase, a $20 billion cryptocurrency exchange, but Lummis staff also said that every U.S.-based cryptocurrency exchange is under investigation in some form.
Related: Coinbase SEC probe could have ‘serious and chilling’ implications: lawyer
Under U.S. law, Howie The test determines whether the transaction constitutes an investment contract (securities). The test states that investment contracts exist “when funds are invested in an ordinary enterprise with a reasonable expectation that profits will come from the efforts of others”.
If ETH or any related crypto asset were found to fall under this definition, then U.S. crypto exchanges would illegally trade securities. The SEC recently listed nine crypto assets as securities.