New US bill listing Bitcoin as a commodity

Four US senators, members of the Agriculture Committee, introduced a bill classifying Bitcoin and other cryptocurrencies as a commodity. This guidance would give the Commodity Futures Trading Commission (CFTC) broader powers to oversee the sector.

A second bill used from the CFTC the dominant watchdog of the crypto sector

A second bill to regulate cryptocurrencies has just been proposed to the US Senate, expanding the commodity category for the occasion. From now on, “digital commodity” could be a regulatory standard that could apply to many cryptocurrencies. But this new legislative effort, commendable as it is, still does not answer the major question which is to clearly distinguish the relevant cryptocurrencies from the commodities category (commodities) or the relevant one from the securities regime (financial securities). Today, only Bitcoin seems to have consensus.

Regulation

Bitcoin is a commodity

Nathalie E. – June 28, 2022 – 10:58

Securities and Exchange Commission (SEC) Chairman Gary Gensler, a […]

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Notwithstanding this capital stumbling block, this new project, if it becomes law, would grant authority to the CFTC to oversee the cash and crypto markets. It, which until now would only regulate its derivatives, such as BTC futures, could therefore also regulate the underlying asset.

A jurisdiction that would rely on the Securities and Exchange Commission (SEC) to define whether this or that crypto falls within the scope of goods. To do this, the regulatory body has an arsenal of tools including the famous “Howey test” which, since the 1930s, defines what is, or is not, a financial security. But, for the moment, it continues, to the great barrage of players in the sector, to maintain a very unartistic vagueness around the question.

CFTC Holds the Rope in Upcoming Crypto Regulation

The stated intention is tohomogenize a regulation that is struggling to unify as stated by Senator Debbie Stablenow, chair of the committee that unveiled the bill.

Right now, there really is a patchwork of state regulations and no federal agency to oversee cryptocurrencies, and we know that needs to change. We are closing regulatory loopholes and requiring these markets to operate under simple rules that avoid customers and keep our financial system safe.

In fact, if adopted, crypto market participants had to register with the federal agency. A requirement formulated by the CEO of FTX. He assured that his company would be happy to place itself under this proposed new regime.

I am really happy to see (…) IIntroduce a strong bill to bring customer protections and federal oversight to crypto. (…) This would ensure clear federal oversight of digital asset commodity markets. (…) We found it constructive and healthy to register under such a regime, finally bringing comprehensive client protection and oversight to spot the crypto commodity markets in the United States. This would help bolster liquidity, while tackling bad actors in the ecosystem.

Sam Bankman-Fried on Twitter

CFTC Chairman Rostin Behnam, who has been battling for a while to place his agency in pole position in the implementation of the upcoming regulations on cryptocurrencies, welcomed this new initiative. After the law on financial innovation presented in June by senators Cynthia Lumnis and Kirsten Gillibrand which already empowered the CFTC to control the sector, the federal agency could well end up stealing the leading role at the SEC from Gary Gensler.

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