Crypto Regulatory Framework Bill Endorsed By House Financial Services Approved

Key Points:

• A key congressional committee on Wednesday introduced Crypto Regulatory Framework Bill aimed at developing a regulatory framework for cryptocurrencies.
• The Republican-led bill would elevate the CFTC in regulating cryptocurrencies.
• This is the first time a bill to regulate cryptocurrencies has been put to a vote in Parliament.

According to Bloomberg, on Wednesday, the Crypto Regulatory Framework Bill was endorsed by the House Financial Services Committee in an effort to systematize federal oversight of the digital asset industry.

“As other jurisdictions like the UK, the [European Union], 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,”

Representative Patrick McHenry, the Republican chair of the House Financial Services Committee said, at the markup.

The bill passed by the House Financial Services Committee would define when a cryptocurrency is a security or a commodity and expand the Commodity Futures Trading Commission (CFTC) oversight of the industry cryptocurrency while also clarifying the authority of the Securities and Exchange Commission, as many crypto advocates complain about the agency’s excessive approach.

Democrats have criticized that the proposed law would give the CFTC more power to regulate the digital asset space without increasing the agency’s funding.

The CFTC is notoriously softer on crypto companies than the Securities and Exchange Commission (SEC), which Democrats say could facilitate future fraud. FTX founder Sam Bankman-Fried and other significant players in the crypto industry have previously petitioned the regulator to be given more power to regulate the space.

Most crypto companies dispute the SEC’s jurisdiction and have pushed Congress in recent months to write legislation clarifying that cryptocurrencies are more like commodities than securities.

Several Democrats, including Representatives Jim Himes and Ritchie Torres, joined Republicans on the committee that voted for the bill. The House Agriculture Committee is expected to consider the same bill on Thursday.

The measure could also face obstacles in the Democratic-led Senate, where the head of the Senate Banking Committee, Sherrod Brown, said he is unsure whether additional legislation is needed to regulate cryptocurrencies.

This is the first time a crypto bill has been put to a vote in Congress, a victory for crypto lobbyists who have spurred lawmakers to clarify the crypto industry regulations.

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