| The Securities and Exchange Commission (SEC) and the CFTC have been at odds over which agency would be deemed overseer of the majority of crypto assets. If the bill passes, the CFTC would be the one in charge.
The Responsible Financial Innovation Act
The newly-drafted bipartisan bill by Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY) contains a number of provisions, including the elimination of reporting gains less than $200 to the IRS, a common taxonomy for digital assets, and the responsibility of the majority of cryptocurrencies and exchanges to the CFTC. The bill would also require digital asset providers to register with the CFTC.
The CFTC already regulates the commodity and financial futures markets, including crypto futures ETFs. So while SEC Chair Gary Gensler has been also looking to expand the regulator’s prowess to include crypto, the bill differentiates between the larger decentralized coins and altcoins that sometimes act like securities.
CFTC Chairman Rostin Behnam has recently stated that he considers both bitcoin and Ether to be commodities under his domain. And following the collapse of TerraUSD, SEC Chair Gensler also said that bitcoin was one of the few coins that should be classified as a commodity and belonged under the CFTC.
The Responsible Securities Innovation section of the bill tries to note the distinction between what coins are commodities (fully decentralized) and which are securities (acting like securities, i.e., being used to build capital, pay dividends, other financial interest in the issuer, or liquidation rights). Coins that act like securities would fall under the purview of the SEC. | 