Senate Can't Act On Guns Or Climate, But It Can Regulator-Shop To Benefit Cryptocurrency "Industry"
I wish I could say I was surprised.
A highly anticipated Senate proposal to bring the freewheeling cryptocurrency industry under federal oversight would deliver a win for the sector by empowering its preferred regulator, the Commodity Futures Trading Commission (CFTC), over the Securities and Exchange Commission. The bill’s sponsors, Sens. Cynthia M. Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.), are touting it as the first serious effort to apply comprehensive regulation to the crypto industry, which has minted a new class of billionaires and promised to reinvent financial services while also spawning scams and investor wipeouts that have raised regulators’ alarms.
But by giving primary responsibility for crypto oversight to the CFTC, the relatively small agency tasked with regulating a swath of financial markets, from grain futures to more complex products, the bill — set for introduction Tuesday — sidelines the SEC, whose chair, Gary Gensler, has taken an aggressive posture toward crypto interests. Gensler argues that most digital assets in the roughly $1.2 trillion market qualify as securities, similar to stock in publicly-traded companies, giving his agency the responsibility to police them and their issuers.
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“The United States is the global financial leader, and to ensure the next generation of Americans enjoys greater opportunity, it is critical to integrate digital assets into existing law and to harness the efficiency and transparency of this asset class while addressing risk,” Lummis said in a statement. Gillibrand added the bill “will establish a regulatory framework that spurs innovation, develops clear standards, defines appropriate jurisdictional boundaries and protects consumers.”
Advocates of tougher crypto regulation argue investors stand to suffer if lawmakers sideline the SEC. “The status quo would be better than this bill,” said Todd Phillips, director of financial regulation and corporate governance at the liberal think tank Center for American Progress. “So many of these tokens are securities and need to comply with the regular, usual securities laws, and this bill tries to create a special crypto-specific disclosure regime that I don’t think discloses all the information investors need to fully evaluate whether to purchase a security.”
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https://www.washingtonpost.com/business/2022/06/07/crypto-lummis-gillibrand-regulation/
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