Congress Introduces Game-Changing Bitcoin and Ethereum Bill Following SEC Lawsuit Against Binance

•  United States legislators have put forward a new proposal known as a “working framework.”
• On June 5, U.S. regulators filed a lawsuit against Binance, accusing them of a “web of deception.”

Amid growing concerns that a potential cryptocurrency crisis is on the verge of erupting, legislators in the United States have put forward a new proposal known as a “working framework.” The primary objective of this initiative is to establish clear regulations that would bring transparency and certainty to companies involved in the Bitcoin and cryptocurrency sector within the nation.

As per Bloomberg’s report, a comprehensive draft bill spanning 162 pages has been introduced by Patrick McHenry, a Republican from North Carolina and chair of the House Financial Services Committee, alongside Glenn Thompson, a Republican from Pennsylvania and chair of the House Agriculture Committee. The proposed bill would establish a mechanism through which digital assets, initially categorized as securities, could eventually fall under the purview of commodity regulations.

Over the past few weeks, prominent Bitcoin and cryptocurrency companies in the United States have raised concerns about the nation lagging behind its global counterparts regarding crypto-related legislation. This comes as Hong Kong implements its new regulatory framework and the European Union enacts the groundbreaking Markets in Crypto Assets (MiCA) regulation.

Despite previous unsuccessful attempts to pass crypto legislation in previous sessions, the recently proposed U.S. crypto bill suggests that cryptocurrencies offered as investment contracts would come under the supervision of the U.S. Securities and Exchange Commission (SEC).

Additionally, those categorized as commodities will be under the purview of the Commodity Futures Trading Commission (CFTC). We still don’t know whether cryptocurrencies like Bitcoin, Ethereum, Binance’s BNB, or Ripple’s XRP will fall under securities or commodities. 

U.S. Sues Binance

On June 5, U.S. regulators filed a lawsuit against Binance, the largest cryptocurrency exchange globally, and its CEO Changpeng Zhao, accusing them of a “web of deception.” As a result of this legal action, the exchange is under even more pressure, which has caused the value of Bitcoin to drop to its lowest point in almost three months. 

The Securities and Exchange Commission (SEC) filed a complaint in a federal court in Washington, D.C., outlining 13 charges against Binance, its CEO Changpeng Zhao, and the operator of its supposedly independent U.S. exchange.”

According to the SEC, Binance engaged in activities such as artificially inflating trading volumes, diverting customer funds, neglecting to impose restrictions on U.S. customers, and providing misleading information to investors regarding its market surveillance measures.

In a recently released blog by Binance, they stated, “We intend to defend our platform vigorously,” adding that “because Binance is not a U.S. exchange, the SEC’s actions are limited in reach.”

Today, the SEC filed civil claims against https://t.co/AZwoBOgsqS in what is the latest example of regulation by enforcement under the current Commission. To be clear, we believe the lawsuit is baseless and we intend to defend ourselves vigorously. However, we want to address…

— Binance.US 🇺🇸 (@BinanceUS) June 5, 2023

In a tweet, Binance.US, which Zhao ultimately controls, expressed its response to the lawsuit, stating that it deemed the legal action unjustified based on the facts, the law, and the Commission’s precedent.

Following the announcement, Bitcoin, the largest cryptocurrency globally, experienced a decline of up to 6 percent, reaching its lowest value in nearly three months. Binance’s native cryptocurrency, BNB, which is the fourth-largest by market size, also witnessed a drop of over 5 percent.

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