A new bill is being proposed in the United States Senate that would also give the Commodity Futures Trading Commission (CFTC) more regulatory power to oversee crypto markets.
Senate Agriculture Committee Chairwoman Debbie Stabenow of Michigan and Republican Senator John Boozman of Arkansas hope to set a national regulatory standard for cryptocurrencies with the bill. It would amend the definition of commodity to include “digital commodity”. This will apply to many cryptocurrencies, including Bitcoin and Ethereum, effectively giving the CFTC jurisdiction over the industry.
The bill would also introduce similar new categories such as digital commodity brokers, digital commodity custodians and digital commodity traders, all of whom would have to register with the authority. “We are closing regulatory loopholes and requiring these markets to operate with simple rules that protect customers and keep our financial system safe,” Senator Stabenow said in a statement.
Of course, all crypto trading platforms will also have to register with the CFTC, which will then be held to the same standards as traditional commodity brokers. In addition to protecting investors from abuse, exchanges should monitor crypto transactions and publish the data in a timely manner.
All cryptocurrency brokers and dealers will be required to keep records of all digital commodity transactions, as well as provide information to the Commission upon request. Consumers should be offered fair prices and protected by providing safeguards against cyber-attacks and also creating risk management systems. Cryptocurrency trading platforms should also disclose conflicts of interest and ensure that investors are aware of the risk involved in trading cryptocurrencies.
Second crypto account
This would be the second bill introduced in the US Senate that seeks to provide a regulatory framework for cryptocurrencies by empowering the CFTC. Democratic Senator Kirsten Gillibrand of New York and Republican Senator Cynthia Lummis of Wyoming introduced the Responsible Financial Innovation Act in June.
In addition to establishing the CFTC as the primary regulator for cryptocurrencies, it would also define how to determine their classification as a commodity or security based on their use, as well as consumer protection and tax details.
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