This Friday, Patrick McHenry and Glenn “GT” Thompson, Chairman of the House Financial Services Committee and of the House Committee on Agriculture respectively, published a draft bill aimed at offering greater clarity with regard to the regulation of the cryptocurrency industry. The representatives called on “stakeholders and market participants” to provide feedback on the proposed legislation.
New Draft Bill Hopes to Bring Regulatory Clarity to the Crypto Industry
On June 2nd, Chair McHenry and Thompson published a draft bill intended to offer greater clarity on the matter of regulation pertaining to the cryptocurrency industry. According to McHenry, the draft represents a first step toward providing a framework that will offer a “balance between consumer protection and encouraging responsible innovation.”
Representative Thomson also specified that a major goal of the bill is to help close the existing gap that exists between the jurisdictions of the SEC and the CFTC with regard to digital assets. Indeed, the two agencies have, over the years, offered some contradictory statements on which cryptocurrencies can and should be considered securities, and which commodities.
The press release published on Friday also calls on “stakeholders and market participants” to offer “constructive feedback” in order to help bring about better legislation. The creation of a functioning framework for regulating the digital assets industry has become an increasingly hot topic over the previous months both due to the increased popularity of cryptocurrencies and high-profile calamities like the downfall of FTX.
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The Dire Need for Regulatory Clarity in the US
There has been a notable increase in enforcement actions targeting the cryptocurrency industry since the start of 2023. The heightened pressure has already caused some digital assets firms to leave the United States citing the regulatory climate and one exchange, Bittrex, even accused SEC’s Gary Gensler of being on a “crusade” after getting sued by the watchdog.
The numerous complaints have also, according to people and entities from within the industry, highlighted the numerous regulatory gaps and a general lack of clarity. Coinbase has been particularly vocal on the issue after receiving a Wells notice from the SEC and claims to have attempted to communicate with the Commission on dozens of occasions in the preceding months without achieving any real success.
Since last summer, there have also been several major moves toward the creation of cryptocurrency-specific legislation. Last September, the White House published its very first framework on the development of digital assets in the country. Furthermore, on March 9th, the Subcommittee on Digital Assets held its very first meeting.
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About the author
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird’s US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
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