New US Bill Will Bring Clarity on SEC and CFTC Jurisdiction Regarding Cryptocurrencies

Updated: 14 June 2023

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The next few weeks will be crucial for the future of cryptocurrencies in the US, as the US House Financial Services Committee will vote on a new crypto bill.

The bill is supposed to bring clarity on SEC and CFTC jurisdiction involving digital assets, and it will establish a regulatory framework for the industry.

The bill will follow the FSC hearing on providing regulatory clarity for the crypto market structure and regulation for payments stablecoins.

📜🚀 The US House Committee is making moves in the #crypto space with a new stablecoin bill draft!

Brace up for potential regulatory changes that would shape the future of #stablecoins.💼💡 #CryptoNews #Unidef $U

— Unidef (@UnidefGlobal) June 12, 2023

It is imperative to decide which regulator gets jurisdiction over crypto

The US House Financial Services Committee’s Republican Chairman, Patrick McHenry, plans to hold a vote on a new crypto bill. The intention of the bill is to bring some much-needed clarity to the digital asset industry.

So far, the industry has been severely lacking in terms of rules and guidelines, as the regulators like the SEC argue that most, if not all, cryptocurrencies are securities. As such, the SEC used securities laws to deal with the industry.

On the other side is CFTC, which argues that cryptos should be seen as commodities and regulated according to commodities laws.

Both regulators have been claiming that most of the industry falls into their respective categories, confusing institutional investors, individual users, and crypto projects. The vote is expected to take place after the lawmakers return on July 11th.

This Tuesday, June 13th, both Democrat and Republican members of the US House discussed two bills that would bring clarity regarding the crypto market structure and regulation of payment stablecoins.

The growing interest in regulating digital assets seems like a step in the right direction, as industry members have demanded regulations for years.

The House Financial Services Committee recognized that both US SEC and its Chair, Gary Gensler, have had the wrong approach to the crypto market. Maxine Waters, the Democrat Ranking Member, commented that allowing crypto exchanges to receive provisional registration might enable bad actors.

Some officials, including Senators Elizabeth Warren and Sherrod Brown, remain skeptical of the crypto industry.

US District Court orders the SEC and Binance.US to reach a compromise

While the bill is long overdue, the necessity for it likely became even more apparent recently after the SEC filed lawsuits against Binance and Coinbase, which caused a lot of criticism. It also started a wave of other problems for the industry.

The US SEC started cracking down on the crypto industry with new enthusiasm after the collapse of FTX last November.

Many believe that the regulator’s lawsuit against Binance and Coinbase has nothing to do with protecting investors but rather that the SEC took this path to ensure its jurisdiction over the crypto sector.

🚨 BREAKING 🚨

JUDGE OVERSEEING THE SEC CASE
AGAINST BINANCE HAVE DECLINED
TO ORDER A TEMPORARY RESTRAINING
ORDER TO FREEZE THE U.S. TRADING
PLATFORM’S ASSETS. HE SAID THERE
IS ABSOLUTELY NO NEED FOR AN RESTRAINING ORDER.

— Ash Crypto (@Ashcryptoreal) June 14, 2023

The two exchanges refused to settle, meaning that they are prepared for a lengthy legal battle with the regulator. However, the US District Court judge ordered the SEC and Binance.US to collaborate and reach a compromise agreement. The judge also ruled that freezing assets will impact investors, which is something that the authorities wish to avoid.

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