By
Steve Muchoki
April 19th, 2024
The bill, initially drafted in early June, aims to create a regulatory framework for crypto exchanges to register with the US Securities and Exchange Commission (SEC).
Over the last few months, US lawmakers have been actively working to form a clear regulatory framework in the country. On Thursday, July 20, the US House of Republicans introduced a new cryptocurrency oversight bill with the goal of having a regulatory framework for investor protection in the crypto industry.
The bill is part of several others trying to establish clear rules for digital assets. It comes at a time when the unclear regulations and aggressive actions from authorities are making some crypto businesses think about leaving the US. Also, crypto startups are hesitant to start their operations due to the lack of regulatory clarity. In a statement on Thursday, Chairman of the House Committee on Agriculture Rep. Glenn “GT” Thompson (R-Pa.) said:
“Today’s introduction of the Financial Innovation and Technology for the 21st Century Act marks a significant milestone in the House Committees on Agriculture and Financial Services efforts to establish a much-needed regulatory framework that protects consumers and investors and fosters American leadership in the digital asset space.”
The bill, initially drafted in early June, aims to create a regulatory framework for crypto exchanges to register with the US Securities and Exchange Commission (SEC). It would allow these exchanges to trade digital securities, commodities, and stablecoins all in one place.
“The crypto industry wants clarity and our collaborative bill gives both the CFTC and SEC a seat at the table. Our bill establishes clear principles to ensure financial security and certainty as digital asset developers continue to innovate,” said Dusty Johnson (R-S.D.) in the statement.
Industry Experts Express Concern Over Revised Bill
Although the Republican lawmakers have made an effort to push the crypto regulatory bill, some industry experts have shared their concerns. In the revised bill on page 10, traditional securities like stocks, bonds, “transferable shares”, “certificates of interest or participation in any profit-sharing agreement”, and similar assets are excluded from the definition of “digital assets”.
According to Gabriel Shapiro, Delphi Labs’ general counsel, a recent change in the bill significantly impacts its value proposition and could reintroduce ambiguity. This change could lead to increased regulation for various assets in the decentralized finance (DeFi) market, including Compound’s cTokens and Liquid Collective’s Liquid Staking Tokens, even if they are not currently regulated.
“The SEC can still go on the warpath…all they have to do is argue that a token is a ‘transferable share’ ‘a profit interest’ etc.,” he warned.