A highly anticipated Senate proposal to bring the 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 Washington Post reported. 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. The bill from Lummis and Gillibrand rejects that claim, asserting instead that “most digital assets are much more similar to commodities than securities,” a joint news release from the senators’ offices said. The CFTC already regulates futures contracts for bitcoin and ethereum, the two most popular cryptocurrencies. But the new proposal gives the agency broad new power by handing it oversight of the crypto spot market as well — and envisions that market including a wide array of digital coins. The bill would create a process for crypto trading platforms such as Coinbase to register with the CFTC.
