US Congressional Committee Advances Cryptocurrency Regulation Bill

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The push for increased regulatory clarity in the cryptocurrency sector has gained momentum in the United States as a bill proposed by Republicans secures approval from the House Financial Services Committee with a decisive vote count of 35-15.

The primary objective of the approved bill is to establish clear criteria for classifying crypto assets as either securities or commodities. Additionally, it aims to strengthen the regulatory authority of the Commodity Futures Trading Commission (CFTC) over the cryptocurrency industry while providing more clarity on the jurisdiction of the Securities and Exchange Commission (SEC). This move directly addresses concerns raised by crypto advocates regarding potential overreach by the SEC.

A significant provision of the bill is to encourage collaboration between the SEC and CFTC by mandating their joint involvement in rulemaking processes. Moreover, the bill calls for in-depth studies on various topics, including nonfungible tokens (NFTs) and decentralized finance (DeFi).

Next in line for review is the House Agriculture Committee, under the leadership of Pennsylvania Republican Glenn Thompson. This segment of the bill includes a proposal for an additional $120 million in funding for the CFTC, granting the agency new authority to supervise digital assets as outlined in the legislation. Representative Patrick McHenry, the Republican chair of the House Financial Services Committee, expressed the urgency of the matter, stating, "As other jurisdictions like the UK, Singapore, and Australia have moved forward with clear regulatory frameworks for digital assets, the United States is at risk of falling behind. We intend to change that today. This is a software revolution and a financial revolution if done correctly."

Democratic opposition to the bill was evident, with some, including Jim Himes of Connecticut and Ritchie Torres of New York, supporting it, citing the current inadequacy in regulations. However, the bill faced resistance from others, notably Democrat Stephen Lynch of Massachusetts, who strongly disapproved of it, labeling it a disaster and the worst bill he had encountered during his 20 years on the panel.

Additionally, several Democrats aligned themselves with the perspective of SEC Chair Gary Gensler. Members of the House Financial Services Committee echoed Gensler's view, contending that the bill might enable cryptocurrencies to evade the protections provided by existing securities laws. The committee's leading Democrat, Maxine Waters of California, referred to the bill as "a wish list for Big Crypto."

In a separate commentary, anti-crypto proponent Brad Sherman of California suggested that Sam Bankman-Fried, former chief of FTX, could have endorsed such a bill.

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