current position:Home>SEC and CFTC wrestling: US senator proposes bill to clarify Crypto regulation

SEC and CFTC wrestling: US senator proposes bill to clarify Crypto regulation

2022-08-04 23:20:42Blockchain Knight

The Digital Goods Consumer Protection Act is a "powerful" attempt to "provide clear federal oversight" for the emerging asset class.

U.S. lawmakers have been working hard to provide a regulatory framework for the Crypto industry.

A new bipartisan bill introduced by U.S. Senators Debbie Stabenow, John Boozman, Cory Booker and John Thune takes another step in that direction.

Lawmakers introduced the Digital Goods Consumer Protection Act of 2022 and proposed a new regulatory term: digital goods.

The Digital Commodities Consumer Protection Act provides that these digital assets will be governed by the U.S. Commodity Futures Trading Commission (CFTC).

The regulator will have "the power to regulate the trading of digital commodities," introducing rules for market participants and enforcing them.The bill proposes that "digital goods platforms" will need to adhere to "the same standards as traditional financial institutions."

Crypto is often dismissed by lawmakers and regulators and classified as an illegal asset.The new bill appears to recognize the status of digital assets and proposes their regulation as other assets in the traditional financial system.

Senator Stabenow shares the following views on the potential impact of the bill and why they feel the need to close the country's regulatory "gap".

“One in five Americans has used or traded digital assets, but these markets lack the transparency and accountability that the financial system expects. This often puts Americans’ hard-earned money at risk.ThisThat's why we are closing the regulatory gap and requiring these markets to operate under the rules to protect customers and the financial system.

Crypto companies are required to operate within a clear regulatory and legal framework, and the CFTC appears to be more inclined to engage in dialogue with companies in the industry than the Securities and Exchange Commission (SEC).

Regulators led by Gary Gensler have been policing through “enforcement,” yet players in the crypto space believe the SEC’s actions are inconsistent with their rhetoric.

SEC Commissioner Hester Peirce said the regulator has decided to shift its approach from "cautious and deliberate" to "implementing hasty and sweeping changes."This could lead companies in the digital asset space to talk to the SEC.

Why does the Crypto industry need federal regulations?

The senators argue that U.S. Crypto investors need a federal regulatory framework, especially as the industry continues to expand.Otherwise, lawmakers argue, state-level regulations may not "ensure" consumer rights.

The act requires companies to register with the CFTC, prevent "abusive trading practices," integrate "advertising standards," disclose "information about the potential risks of dealing with digital goods," and more.

U.S. Senator Boozman offered his views on the growing relevance of digital assets and their potential impact on the financial sector.

“Digital assets and blockchain technology have and will continue to change the way global markets work. However, this fast-growing industry is currently governed primarily by state-level regulations. This is simply not an effective way to protect consumers from fraud."

Sam Bankman Fried, CEO of mainstream Crypto exchange FTX, welcomed the legislation and praised the efforts of the U.S. senator.

Sam Bankman Fried tweeted that the bill is a "strong" attempt to "provide clear federal oversight" for the emerging asset class.

However, some Crypto users pointed out that the bill requires companies to register with the CFTC and that the term "digital goods" lacks clarity, which Crypto will be regulated by the CFTC and which will be regulated by the SEC?

Peter Van Valkenburgh tweeted, "The Act requires Crypto companies to register with the CFTC and enforce mandatory regulation of 'Digital Goods Platforms'."

"This is similar to what we and the DCEA called for CFTE to replace MTL in 2018. However, we remain concerned that the bill will have an undue impact on developers and users."

The original text comes from bitcoinist, compiled and organized by the blockchain knight, the English copyright belongs to the original author, please contact the editor for Chinese reprint.

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