By FATIMA HUSSEIN and KEN SWEET – Associated Press
WASHINGTON (AP) — A bipartisan group of senators on Wednesday introduced a bill to regulate cryptocurrencies, Congress’ latest attempt to formulate ideas on how to monitor a multi-billion dollar industry ravaged by collapsing prices and lenders shutting down.
The rules offered by Senate Agriculture Committee chairman Debbie Stabenow and Republican top member John Boozman would authorize the Commodities Futures Trading Commission to be the default regulator for cryptocurrencies. That would contradict bills proposed by other members of Congress and consumer advocates, who have proposed empowering the Securities and Exchange Commission.
This year, crypto investors have seen prices plummet and companies become craters with fortunes and jobs disappearing overnight, and some companies have been accused by federal regulators of running an illegal stock exchange. Bitcoin, the largest digital asset, is trading at a fraction of its all-time high, from over $68,000 in November 2021 to about $23,000 on Wednesday. Industry leaders have referred to this period as a “crypto winter,” and lawmakers have desperately pushed for strict scrutiny.
The bill by Stabenow, a Democrat from Michigan, and Boozman, from Arkansas, would require all cryptocurrency platforms — including traders, dealers, brokers and sites that hold crypto for customers — to register with the CFTC.
The CFTC has historically been an underfunded and much smaller regulator than the SEC, which has armies of investigators to investigate potential abuses. The bill seeks to alleviate these problems by imposing user fees on the crypto industry, which in turn would fund more robust oversight of the industry by the CFTC.
“Our bill gives the CFTC exclusive jurisdiction over the spot market for digital commodities, which will lead to greater safeguards for consumers, market integrity and innovation in digital commodities,” Boozman said in a statement.
Sens. Cory Booker, DN.J., and John Thune, RS.D., are co-sponsors of the bill.
“It is critical that the (CFTC) has the right tools to regulate this growing market,” Thune said.
The legislation can be added to the list of proposals that have come out of Congress this year.
sen. Pat Toomey, R-Pa., introduced legislation in April called the Stablecoin TRUST Act that would create a framework for regulating stablecoins, which have suffered massive losses this year. Stablecoins are a type of cryptocurrency pegged to a specific value, usually the US dollar, another currency or gold.
In addition, Sens. Kirsten Gillibrand, DN.Y., and Cynthia Lummis, R-Wyo., in June, proposed a comprehensive bill called the Responsible Financial Innovation Act. That bill proposed legal definitions of digital assets and virtual currencies; would require the IRS to adopt guidelines for merchant acceptance of digital assets and charitable contributions; and would differentiate between digital assets that are commodities and those that are securities, which has not happened.
Along with the Toomey legislation and the Lummis-Gillibrand legislation, a proposal is being worked out in the House Financial Services Committee, although those negotiations have stalled.
Commission Chair Maxine Waters, D-Calif., said last month that while she, North Carolina top Republican member Patrick McHenry and Secretary of the Treasury Janet Yellen had made significant progress toward an agreement on the legislation, “We’re not there yet. , and will therefore continue our negotiations during the August recess.”
President Joe Biden’s working group on financial markets released a report last November calling on Congress to pass legislation that would regulate stablecoins, and Biden issued an executive order earlier this year calling on several agencies to look at ways to regulate digital assets.
Follow AP’s coverage of the cryptocurrency industry at https://apnews.com/hub/cryptocurrency.
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