As per the new Senate Bill, SEC should only oversee securities. The law mentions Bitcoin and Ether while noting that the CFTC should regulate other commodities.
The Commodity Futures Trading Commission (CFTC) is a Federal Agency that regulates the derivatives markets, including swaps, futures contracts, and options in the United States.
Its purpose is to ensure competitive and efficient markets and the protection of investors against manipulation, abusive trade practices, and fraud.
The Digital Commodities Consumer Protection Act was introduced last August 3, 2022, co-authored by Senator John Boozman (R-Ark.) and Senator Debbie Stabenow (D-Mich.), puts legislation classifying Bitcoin and Ether as commodities, not securities.
What is the implication of this?
It means that SEC is out and CFTC is in. Furthermore, any exchange that will allow the trade of bitcoin and ether must register under the CFTC for regulation.
With the increase in heists and attacks rampant on multiple exchanges and wallets, CFTC will add a layer of security to balance decentralized autonomy.
While the SEC which is around 6 to 7 times the size of CFTC, will still control some aspects of governance in the crypto universe as we speak.
In a statement by Senator Boozman, he says: “Digital assets and blockchain technology have already, and will continue, to change the way global markets function.”
Yet, this fast-growing industry is currently primarily governed by a patchwork of regulations at the state level” Sheila Warren, CEO of the Crypto Council for Innovation, said: “Data shows that those with no bank account, credit card, or retirement are turning to crypto. Crypto Council for Innovation is an advocacy group of industry members that engage with regulators.”
She said the next steps “require a thoughtful approach to bring people in and rebuild trust.”
This proposed bi-partisan bill can be seen as a pro-trader move by regulators to ensure the safety and integrity of a system without checks and balances.
