House Financial Services Committee Passes Crypto Regulatory Framework Bill
In Brief
The House Financial Services Committee has passed a Crypto Regulatory Framework Bill to define when a cryptocurrency is a security or a commodity and expand the Commodity Futures Trading Commission (CFTC) oversight of the industry, which could face obstacles in the Democratic-led Senate.
In an unprecedented move, a key congressional committee has unveiled a Crypto Regulatory Framework Bill focused on structuring regulations for cryptocurrencies. The Republican-inspired legislation aims to strengthen the Commodity Futures Trading Commission (CFTC) in cryptocurrency regulation. This is the inaugural instance of a crypto regulatory bill going to a vote in Congress.
Bloomberg reported that the bill received endorsement from the House Financial Services Committee on Wednesday. The initiative’s goal is to unify federal governance of the burgeoning digital asset industry.
Patrick McHenry, Republican chair of the House Financial Services Committee, asserted the US’s need to align with other jurisdictions like the UK, EU, Singapore, and Australia in their regulatory clarity for digital assets.
The legislation, if passed, would establish whether a cryptocurrency is a security or commodity. It also proposes to widen the CFTC’s surveillance of the industry while defining the Securities and Exchange Commission’s (SEC) authority. Some industry advocates have voiced concerns about the SEC’s alleged overreach.
Democratic critics claim the proposed law unjustly strengthens the CFTC without increased funding. They worry about CFTC’s lenient approach towards crypto firms compared to the SEC. This leniency, they argue, could potentially facilitate fraud.
Crypto Regulatory Framework Bill
Leading figures in the crypto industry, such as FTX founder Sam Bankman-Fried, have previously called for enhanced regulation of the sector. Many companies in the space challenge the SEC’s jurisdiction and have lobbied Congress to clarify that cryptocurrencies bear a closer resemblance to commodities rather than securities.
Despite these controversies, several Democrats on the committee, including Representatives Jim Himes and Ritchie Torres, supported Republicans by voting for the bill. It is now set for review by the House Agriculture Committee.
However, the bill may face hurdles in the Democratic-led Senate. Sherrod Brown, head of the Senate Banking Committee, has expressed uncertainty about the necessity of further legislation to govern cryptocurrencies.
This development marks a milestone for crypto lobbyists who have been pushing for more explicit regulations for the industry. Despite potential obstacles, this move represents a significant step forward for the crypto regulation landscape.
- The Biden White House has created a new set of rules for digital assets, like cryptocurrencies, to help protect people who use them.
Read more related articles:
- RBA Evaluates Regulatory Framework for Stablecoins and CBDCs
- Coinbase CEO Brian Armstrong to Engage in Crypto Regulatory Discussions with House Democrats
- South Korea’s Financial Services Commission to Institutionalize Security Tokens
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Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
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Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
