On July 12, an amended crypto bill will be introduced by Sens. Cynthia Loomis and Kirsten Gillibrand.
The amended “Responsible Financial Innovation Act” aims to classify most crypto assets as commodities, similar to gold.
That would put them under the umbrella of the Commodity Futures Trading Commission (CFTC) rather than the Securities and Exchange Commission, which “stifles innovation in financial technologies,” according to the senators.
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The Securities and Exchange Commission (SEC) wants to implement 90-year-old legislation to regulate and treat crypto companies like banks and stock exchanges.
“Local industries are really trying to comply, for the most part, and they’re just taking the cold shoulder,” said Loomis, who added. according to wired.
The newly proposed legislation aims to protect investors and prevent major crashes that have crippled the industry in 2022. However, it does not call for enforcement action, lawsuits, or demand freezing of stock exchange assets to harm investors (which the SEC does).
The report, citing a person familiar with the law, explained that the new law, if passed, would require cryptocurrency exchanges to store customer funds in third-party trust funds. It will also prevent insider trading by exchanges that use their own funds or tokens.
Moreover, the CFTC will also have the power to supervise the exchange affiliates for possible crimes.
The law also prohibits “re-tagging,” which is the practice of financing digital assets already held in other loans.
The legislation has already been passed to the CFTC and the Securities and Exchange Commission (SEC) for their jurisdiction, but Lummis worries it will be blocked.
“After all our efforts to reach out to them and work with them, I don’t want them to come in at the last minute to put their kibosh on this.”
America is already behind the rest of the world when it comes to crypto regulations. As a result, a wave of talent, innovation and capital has already begun.
Crypto Market Outlook
While the cryptocurrency markets will be supported by progressive legislation in the US, sentiment and volumes are currently flat.
Total capitalization was flat on the day at $1.23 trillion, with very little movement in the high-value coins over the past 24 hours.
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