House Republicans’ draft legislation gains support from crypto advocates.
A new draft legislation has gained support from cryptocurrency advocates, who are pleased with its emphasis on defining the difference between a security and a commodity. Republican lawmakers from the US House Financial Services Committee and the House Agriculture Committee teamed up on Friday to create a discussion draft that would regulate digital assets. The legislation aims to provide clear guidelines on when a digital asset should be considered a security and therefore regulated by the Securities and Exchange Commission. It also seeks to establish a process for how digital assets are treated and how intermediaries can register with the SEC or Commodity Futures Trading Commission.
Blockchain’s Chief Legal Officer, Paul Grewal, tweeted on Friday afternoon that he was encouraged by the attention given to the discussion around what constitutes a security versus a commodity. He hopes that these definitions will help settle the protracted debate once and for all. The bill specifically creates a framework that would give the CFTC jurisdiction over digital commodities and clarifies the SEC’s jurisdiction over “digital assets offered as part of an investment contract.” The legislation also sets up a framework for when certain digital assets would become decentralized and therefore a commodity under the CFTC, no longer under the SEC’s jurisdiction, although the SEC can challenge this.
Brett Quick, head of government at the Crypto Council for Innovation, tweeted that she was encouraged to see the bill text. “Establishing clarity and transparency on when a digital asset is a security or a commodity is critical, and defining the SEC’s and CFTC’s respective roles is an important step,” Quick said.
Coordination on the Hill?
Senior policy officials said they hoped to speak with Rep. Maxine Waters, D-Calif., who used to chair the House Financial Services on the legislation. The officials also confirmed that the discussion draft was not shared ahead of the announcement on Friday with Democrats. The House Agriculture Committee plans to hold a hearing next week on digital assets called “The Future of Digital Assets: Providing Clarity for Digital Asset Spot Markets.” Blockchain’s Grewal said he would be testifying at that hearing.