US House Approves Crypto Regulatory Bill

A proposed bill aimed at providing regulatory clarity has been approved by the House Financial Services Committee in the United States. The bill, spearheaded by Republicans, secured a 35-15 vote count, signalling growing support for increased oversight and clear guidelines in the crypto industry.

JUST IN: 🇺🇸 US House Financial Services Committee passes bill to establish regulatory framework for #crypto.

— Watcher.Guru (@WatcherGuru) July 27, 2023

CFTC and SEC Collaboration

The primary objective of the approved bill is to establish unambiguous criteria for classifying crypto assets as either securities or commodities. By doing so, it seeks to address concerns from lobbyists and investors in the crypto space who have been advocating for more transparent regulations. Additionally, the bill aims to bolster the regulatory authority of the Commodity Futures Trading Commission (CFTC) over the crypto industry and provide further clarity on the jurisdiction of the Securities and Exchange Commission (SEC).

One key focus of the bill is to promote collaboration between the SEC and CFTC through mandatory joint rulemaking engagements. This move is intended to foster coordination between the two agencies and streamline regulatory efforts in the crypto space. The bill also mandates studies on crucial topics, including nonfungible tokens (NFTs) and decentralized finance (DeFi), acknowledging the rapidly evolving nature of the crypto ecosystem.

Pennsylvania Republican Glenn Thompson, leading the House Agriculture Committee, is set to review its own section of the bill, which includes an allocation of an additional $120 million in funding for the CFTC. This provision is intended to grant the agency enhanced supervisory powers over digital assets, subject to the proposed legislation.

While some Democrats, such as Jim Himes of Connecticut and Ritchie Torres of New York, showed support for the bill, others strongly opposed it. Massachusetts Democrat Stephen Lynch vehemently disapproved of the bill, labeling it a disaster and one of the worst bills he has encountered during his 20-year tenure on the panel.

Critics, including several Democrats aligned with SEC Chair Gary Gensler’s perspective, argued that the bill could potentially allow cryptocurrencies to bypass the protective measures provided by existing securities laws. Maxine Waters, the leading Democrat on the House Financial Services Committee, referred to the bill as “a wish list for Big Crypto.”

The bill’s approval in the House Financial Services Committee marks a crucial step in the ongoing effort to establish comprehensive regulations in the crypto sector. As the bill progresses through further reviews and potential amendments, the debate over crypto regulation is likely to intensify, with proponents and opponents continuing to voice their concerns about striking the right balance between innovation and investor protection.