Congress is likely to decide the fate of the cryptocurrency jurisdiction: Lummis staff member

The US Congress will need to step in to decide who gets the bragging rights of cryptocurrency regulation if the SEC and CFTC can’t fix the problem internally.

A staff member of US Senator Cynthia Lummis believes that the US Congress will need to step in and resolve the dispute between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) over who regulates cryptocurrencies if the matter does not. ago cannot be resolved internally.

The problem dates back to 2014, when the CFTC first asserted jurisdiction over virtual currencies. This was later reiterated by a 2018 U.S. Federal Court ruling that the CFTC has jurisdiction to prosecute criminals in fraud cases involving virtual currencies. However, it is the SEC that has mainly studied US-based cryptocurrency exchanges and cryptocurrency assets to date.

On August 3, Senators Debbie Stabenow (Michigan) and John Boozman (Arkansas) introduced the Digital Commodities Consumer Protection Act of 2022 (DCCPA). If the bill passes the US legislature, the CFTC would be granted the right to regulate digital products.

Specifically, the DCCPA would classify both Bitcoin (BTC) and Ether (ETH) as digital commodities and not securities. This is especially important as SEC President Gary Gensler recently said in an interview with US business news channel CNBC that BTC is the only cryptocurrency that is comfortable with tagging as a commodity:

“Some, like Bitcoin, and that’s the only one I’m going to say because I’m not going to talk about any of these tokens, but my predecessors and others said they were a commodity.”

But despite the tension, the Lummis employee thinks the DCCPA bill has less than a 50 percent chance of passing this year:

“The only way either of the two bills would pass this year is if a catastrophic Black Swan event, such as the crash of a major US stock market, could mobilize lawmakers.”

The news comes after the SEC began investigating the $ 20 billion cryptocurrency exchange Coinbase, but Lummis staff also said that every U.S.-based cryptocurrency exchange is being investigated in one form or another. ‘other.

In US law, the Howey test determines whether a transaction constitutes an investment contract (security). The test states that an investment contract exists “when you invest money in a mixed company with a reasonable expectation of benefits from the efforts of others.”

If ETH, or any other cryptocurrency asset falls within this definition, US-based cryptocurrency exchanges are illegally trading securities. The SEC recently listed nine cryptocurrencies as stocks.

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