US Senators Cynthia Lummis and Kirsten Gillibrand are reportedly primed to propose a fresh legislative piece focused on regulating cryptocurrencies and other digital assets. The ‘Responsible Financial Innovation Act’ is to be reintroduced in an era of ongoing uncertainty surrounding the destiny of digital asset regulation.
Interestingly, this upcoming bill professes to classify the majority of cryptocurrencies as commodities similar to gold. This move comes in a clouded atmosphere of confusion over which financial watchdog should commandeer the oversight of cryptocurrencies – should it be the US Securities Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC)? Both have been assertive in penalizing crypto companies for violations of laws within their jurisdictional authority. For instance, we have seen the SEC pursuing lawsuits against tech behemoths like Coinbase, and the CFTC also crossing swords with premier companies such as Binance.
This upcoming legislation is anticipated to enforce crypto exchanges to entrust consumers’ assets in third-party trusts, thereby ensuring another level of security. A further significant move visualized in the bill is the cessation of proprietary trading, which denotes the trading of exchange’s funds on their platform, a substantial shift for many platforms.
However, critics argue this might also lead to unintended ramifications. One illustration is the earmarked prohibition for crypto lenders’ to finance digital assets with collateral already pledged to different loans.
Republican Senator Cynthia Lummis expounded the need to flexibly adapt digital assets into existing law, capitalizing on the efficiency and transparency of this emerging asset class. Simultaneously, she stressed the responsibility of lawmakers to shape legislation that fosters innovation while safeguarding consumers against malign entities.
In the crafting of this important bill, both the SEC and other agencies were consulted and some their suggestions were incorporated into the proposed legislation. This concession does show a level of openness to regulated innovation however, Lummis expressed her concern over the agencies potentially striking down the bill.
Yet, opposition against the SEC isn’t only anticipated to come from legislatures. Recently, several Republican lawmakers have called for the resignation of SEC chair Gary Gensler due to his stance on cryptocurrency regulation. Regardless of these intensified political pressures, the SEC continues on its path, having declared over 60 cryptocurrencies to be securities till now.
Source: Cryptonews
