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Senators Cynthia Lummis and Kirsten Gillibrand recently released a crypto bill seeking to change the regulatory scope for cryptocurrencies in the US. Senator Gillibrand has commented on the bill, saying that the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) agree that Bitcoin (BTC) and Ether (ETH) are commodities.
SEC & CFTC agree that BTC and ETH are commodities
Senators Lummis and Gillibrand discussed the contents of the recently introduced bill with the Washington Post. The two legislatures noted that there were clear factors differentiating between which digital assets are commodities and which ones are “ancillary assets.”
Lummis said that ancillary assets were non-fungible tokens (NFTs) or crypto assets that could not be ranked as a means of payment and a store of value. On the other hand, securities are assets that fit within the criteria set by the Howey Test.
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Tokens that could be ranked as securities are those that bestow the holders with voting rights and dividend payments. They also allow the users to share in the profits and revenues, among a wide range of other things related to the business.
Gillibrand added that the bill would bestow powers to the SEC and the CFTC to regulate the cryptocurrency market. The SEC would oversee most cryptocurrencies, while the largest share of the crypto market would be regulated by the CFTC, including tokens like Bitcoin and Ethereum.
Gillibrand added that “If you’re like Bitcoin, and creating a proof of work or a proof of stake type of token, you may well be a commodity.” The two senators also said that the SEC Chair, Gary Gensler, has yet to read the bill, but both he and the CFTC Chair agree that Bitcoin and Ethereum are commodities.
However, in his previous utterances, Gensler has only classified Bitcoin as a commodity. The SEC Chair has been hesitant to clear other cryptocurrencies, including Ether as a commodity, and in 2018, during a lecture on a blockchain course, he said that ETH passed the Howey test.
Democrat and Republican views on Bitcoin
The political scene has shown differing views about Bitcoin. Most senators that support Bitcoin are Republican, including Cynthia Lummis, Pat Toomey, and Ted Cruz. On the other hand, Democrat members have shown skepticism over the crypto sector.
Senator Gillibrand, a Democrat, has argued that the progressive political divide had many factors to love about the crypto industry because it could provide democracy to the financial sector.
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