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Congressional legislation aims to protect cryptocurrency exchanges from SEC enforcement actions

Member of the Senate Banking Committee and US Senator Bill Hagerty has proposed legislation that would shield cryptocurrency exchanges from “certain” Securities and Exchange Commission (SEC) enforcement actions.

Sen. Hagerty introduced the Digital Trading Clarity Act of 2022, which seeks to provide regulatory clarity around the two main issues that crypto exchange businesses face: (i) the classification of digital assets, and (ii) associated liabilities under current securities laws.

A bill to provide digital asset intermediaries with a safe harbor from certain enforcement actions by the Securities and Exchange Commission, and for other purposes. Source: congress.gov

Sen. Hagerty outlined an overview of the problems amid regulatory hurdles:

“The current lack of regulatory clarity for digital assets presents entrepreneurs and businesses with a choice: navigate the significant regulatory ambiguity in the U.S., or move overseas to markets with clear digital asset regulations.”

Sen. Hagerty claims that the aforementioned regulatory uncertainty deters investment in the cryptocurrency sector and limits US job growth opportunities. The blockade “threatens the United States’ leadership in this transformative technology at such a crucial time,” according to the report.

The senator thought that if the bill were to pass, it would not only give cryptocurrency businesses “much-needed certainty,” but it would also help the U.S. cryptocurrency markets grow and become more liquid.

The Senate, the House, and the President of the United States must all approve the bill for it to become law.

The federal government increased efforts to study the viability of central bank digital currencies (CBDCs) in the American market in parallel with the regulatory reforms suggested by US senators.

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