06.08.2022

Lummis-Gillibrand Crypto Bill Welcomed

06.08.2022
Shanny Basar
Lummis-Gillibrand Crypto Bill Welcomed

Kristin Johnson, Commissioner at the Commodity Futures Trading Commission, said the framework for crypto regulation introduced by Senators Kirsten Gillibrand and Cynthia Lummis has done a good job of navigating between the responsibilities of the CFTC and the Securities and Exchange Commission.

Johnson spoke at the IDX conference hosted by FIA, the trade organization for futures, options and centrally cleared derivatives in London on 8 June.

She said: “Gillibrand and Lummis did a good job of attempting to navigate this bifurcated assignment of regulation between the SEC and CFTC.”

In the US securities are overseen by the SEC while commodities are regulated by the CTC.

“in a particular way that really leads us to be a little bit back on our heels in this nascent asset class,” Johnson added. “Over time we will get our arms around the operational infrastructure that relates to settlement and trading of these particular assets, the attributes of the assets and effectively protect customers but this is a tough task.”

On 7 June 2022 U.S. Senators Gillibrand (D-NY), member of the Senate Agriculture Committee, and Lummis (R-WY), member of the Senate Banking Committee, introduced the Responsible Financial Innovation Act to create a complete regulatory framework for digital assets.

The full text of the bill is available here, in addition to a section-by-section overview. Read the senators’ joint Medium post about their bill here.

The Act assigns regulatory authority over digital asset spot markets to the CFTC.

The senators said in a statement: “Understanding that most digital assets are much more similar to commodities than securities, the bill gives the CFTC clear authority over applicable digital asset spot markets, which aligns well with their current purview over other commodity markets. Digital assets that meet the definition of a commodity, such as bitcoin and ether, which comprise more than half of digital asset market capitalization, will be regulated by the CFTC.”

Venture capitalist Fred Wilson said in a blog that the bill is a big step in the right direction for crypto assets to be treated as commodities under the CFTC, rather than as securities.

“Crypto tokens are a foundational element of web3, a technology architecture that allows for decentralized applications which lessen the control of big tech monopolies on our lives and our data, and that allows for users to own their data and a share of the networks that the applications are built on,” wrote Wilson. “Constraining these user tokens as securities is not only incorrect but also would inhibit much of their utility and therefore the potential for web3 to remake the technology industry as is so desperately needed.”

Miles Jennings, General Counsel & Head of Decentralization @a16z crypto: 

TuongVy Le, Partner and Head of Regulatory & Policy @baincapcrypto:

Matt Homer, Executive in Residence at Nyca Partners, and previously head of innovation at the New York Department of Financial Services:

Law firm Davis Polk & Wardwell:

Better Markets, the independent, nonpartisan, nonprofit said:

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