Prominent Republican members of the US House of Representatives, led by House Agriculture Committee Chairman Glenn Thompson, along with Republican Reps. French Hill and Dusty Johnson, have unveiled a bill to provide a framework for governing crypto markets. The development follows the recent XRP ruling that many experts considered a positive direction for the industry.
According to Thompson, the legislation “marks a significant milestone in the House Committees on Agriculture and Financial Services’ efforts to establish a much-needed regulatory framework that protects consumers and investors.”
The bill aims to clarify when and how firms should register with the SEC (Securities and Exchange Commission) or the CFTC (Commodity Futures Trading Commission) and provide clarity to assets that were introduced as potential securities and eventually turned into commodities. It proposes that whether an asset is a commodity or a security will depend on if the parent blockchain is decentralized enough or not. The current regulations around crypto markets are still unclear in the US, and the proposed legislation looks forward to addressing this issue.
Financial Services Chair, Patrick McHenry of North Carolina, has also backed the legislation, supporting the efforts to regulate the crypto markets.
The bill has undergone several changes since the June draft. One notable modification is related to SEC or CFTC provisional registrations. US crypto firms would be able to submit a notice of intent to register with the agency. They won’t be subjected to enforcement proceedings regarding registration or token listings. However, they will still need to adhere to rules related to protecting customer assets and disclosure. The authorities will continue to pursue firms for deceit or manipulation.
Previously on July 13, watchdog organizations in the US were opposing a draft bill that aims to regulate the crypto market, claiming it benefits the industry and lacks practical uses for cryptocurrencies. They were particularly concerned about a provision that uses “innovation” as a benchmark for SEC regulatory rulemaking.
The bill aims to establish a regulatory framework for the crypto industry in the US. In June 2023, the SEC took action against major crypto exchanges, Coinbase and Binance, but it had minimal impact on market prices. Committee Chair Representative Patrick McHenry planned to hold a committee vote on the bill in July 2023.
As of now, the bill remains a Republican initiative and would require Democratic support, especially in the Senate, to be passed. Some Democratic lawmakers, including Maxine Waters, have expressed concerns about the bill, while the SEC maintains that new regulations are unnecessary for defining its oversight on tokens.