The Commodity Futures Trading Commission (CFTC) has welcomed another digital asset regulation bill that extends its oversight powers over the industry. The bill, which has been expected for months, is intended to “amend the Commodity Exchange Act to provide the CFTC jurisdiction to oversee the spot digital commodity market.”
Titled “Digital Commodities Consumer Protection Act of 2022,” it was introduced to the Senate this week by a bipartisan group of lawmakers which includes Senator Debbie Stabenow (D-MI), chairwoman of the Senate Committee on Agriculture, Nutrition, and Forestry, and John Boozman (R-AR), ranking member, together with Senators Cory Booker (D-NJ) and John Thune (R-SD).
Senator Stabenow stated that the bill would close the regulatory gap in the digital assets market, thereby ensuring that American consumers are protected.
“One in five Americans have used or traded digital assets—but these markets lack the transparency and accountability that they expect from our financial system. Too often, this puts Americans’ hard-earned money at risk. That’s why we are closing regulatory gaps and requiring that these markets operate under straightforward rules that protect customers and keep our financial system safe,” she said.
CFTC Chairman Rostin Behnam noted in a statement that the digital assets market was at “a critical inflection point” that needs new legislative authority to bring clarity.
Meanwhile, the text of the bill has been noted to need tightening. The bill does not entirely clarify which digital assets are commodities and fall under the CFTC’s powers and which are securities to be regulated by the SEC. It only cites Bitcoin and Ether as examples of digital commodities.
This leaves the boundaries of the law to be dictated by courts and the SEC. The bill is framed because the House Committee on Agriculture only has jurisdiction over commodities regulated by the CFTC.
CFTC’s lobby efforts for more power over digital assets paying off
While the latest bill isn’t comprehensive enough, it is not the only recent digital assets regulation that elevates the CFTC’s powers over the market. The Responsible Financial Innovation Act proposed by Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY) in June is a more all-encompassing bill that elevates the roles of both the CFTC and the SEC.
Meanwhile, the bills have favored the CFTC’s perennial efforts to get more jurisdiction in the digital assets market. The CFTC has also resolved to explore all the powers available to it to crackdown on digital assets criminals while it is awaiting the passage of the bills.
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