On Wednesday, US Senators Debbie Stabenow, John Boozman, Cory Booker, and John Thune introduced a new bipartisan bill to clarify which regulatory agency would have a larger role in the regulation of crypto assets and to plug the regulatory gaps in the country.
The Digital Commodities Consumer Protection Act of 2022 will define Bitcoin and Ether as digital commodities and has given powers to US Commodities Futures Trading Commission (CFTC) to regulate the digital commodities.
The bill mandates the regulation of digital commodity brokers, digital commodity custodians, digital commodity dealers, and digital commodity trading facilities, which are essentially crypto exchange platforms by CFTC. It gives CFTC the power to introduce rules for market participants and enforce them.
Following in the introduction of the bill, Senator Stabenow said: “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. 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.
If the bill is passed, it will force crypto companies to comply with all regulatory norms, prevent abusive trading practices, integrate advertising standards, and disclose information about the potential risk of trading with digital assets.
Senator Boozman added: “This fast-growing industry is currently governed largely by a patchwork of regulations at the state level. That simply is not an effective way to protect consumers from fraud.”
The bill will also set the tone for global regulation of crypto assets—a huge and hard-to-ignore asset class now.
Although crypto players welcomed the bill, they noted that users will need more clarity on the classification of crypto assets, and on which crypto asset will be regulated by the CFTC and which by the SEC?