Senate bill seeking CFTC oversight over bitcoin, ether could ‘free up billions’ of dollars.
A bill introduced by a handful of U.S. senators looking to empower the Commodity Futures Trading Commission to regulate bitcoin (BTC-USD) and ethereum (ETH-USD) would deem the two largest cryptocurrencies by market cap as so-called digital commodities in a move that could “potentially free up billions of capital” into them, said Marcus Sotiriou, an analyst at digital asset broker GlobalBlock.
If the proposed bipartisan legislation, aka the Digital Commodities Consumer Protection Act, were to take effect, “it would mean that these BTC and ETH are the only cryptos that are not able to be classified as securities, which would remove a significant concern for side-lined institutions,” Sotiriou wrote in a note on August 4.
The key part of this bill is that bitcoin (BTC-USD) and ether (ETH-USD) would not be classified as securities. Generally, if a digital token were categorized as a security, crypto exchanges such as Coinbase Global (COIN), for example, would likely find themselves burdened since they would have to then register with the Securities and Exchange Commission for listing securities, and would have to pay fines if they didn’t, Sotiriou explained to Seeking Alpha via email.
“Therefore, the Ethereum (ETH-USD) token’s price would likely fall due to exchanges delisting it, to avoid facing fines for breaking securities laws,” he added.
Meanwhile, Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI) and Sen. John Boozman (R-AR), both of whom are sponsoring the measure among a total of four senators, are seeking to close regulatory gaps in the crypto space by putting the derivatives regulator at the forefront of monitoring bitcoin (BTC-USD) and ether (ETH-USD) as well as digital commodity platforms, including trading facilities, brokers and custodians.
“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,” Stabenow said in a statement after unveiling the bill on Aug. 3. “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.”
As headlines over the past year have shown, SEC Chair Gary Gensler has been quite vocal about wanting to apply traditional disclosure and anti-fraud provisions to cryptos. While he previously contended that bitcoin (BTC-USD) is a commodity, Gensler told CNBC early in 2022 that "it's about bringing it crypto into the securities laws and, unfortunately, way too many of these are trying to say 'well, we're not a security, we're just something else.'" Senate bill seeking CFTC oversight over bitcoin, ether could ‘free up billions’ of dollars.
A bill introduced by a handful of U.S. senators looking to empower the Commodity Futures Trading Commission to regulate bitcoin (BTC-USD) and ethereum (ETH-USD) would deem the two largest cryptocurrencies by market cap as so-called digital commodities in a move that could “potentially free up billions of capital” into them, said Marcus Sotiriou, an analyst at digital asset broker GlobalBlock.
If the proposed bipartisan legislation, aka the Digital Commodities Consumer Protection Act, were to take effect, “it would mean that these BTC and ETH are the only cryptos that are not able to be classified as securities, which would remove a significant concern for side-lined institutions,” Sotiriou wrote in a note on August 4.
The key part of this bill is that bitcoin (BTC-USD) and ether (ETH-USD) would not be classified as securities. Generally, if a digital token were categorized as a security, crypto exchanges such as Coinbase Global (COIN), for example, would likely find themselves burdened since they would have to then register with the Securities and Exchange Commission for listing securities, and would have to pay fines if they didn’t, Sotiriou explained to Seeking Alpha via email.
“Therefore, the Ethereum (ETH-USD) token’s price would likely fall due to exchanges delisting it, to avoid facing fines for breaking securities laws,” he added.
Meanwhile, Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI) and Sen. John Boozman (R-AR), both of whom are sponsoring the measure among a total of four senators, are seeking to close regulatory gaps in the crypto space by putting the derivatives regulator at the forefront of monitoring bitcoin (BTC-USD) and ether (ETH-USD) as well as digital commodity platforms, including trading facilities, brokers and custodians.
“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,” Stabenow said in a statement after unveiling the bill on Aug. 3. “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.”
As headlines over the past year have shown, SEC Chair Gary Gensler has been quite vocal about wanting to apply traditional disclosure and anti-fraud provisions to cryptos. While he previously contended that bitcoin (BTC-USD) is a commodity, Gensler told CNBC early in 2022 that "it's about bringing it crypto into the securities laws and, unfortunately, way too many of these are trying to say 'well, we're not a security, we're just something else.'" |
