U.S. Senate To Authorize CFTC to Regulate Cryptocurrencies

According to a report on August 3rd, a new bill introduced in the U.S. Senate would make the Commodity Futures Trading Commission (CFTC) the direct regulator of the largest cryptocurrency.

The measure, introduced by senior Democrats and Republicans of the Senate Committee On Agriculture, Nutrition & Forestry, would give the derivatives regulator exclusive jurisdiction over bitcoin and ether, two of the most popular cryptocurrencies, as well as any other cryptocurrency products identified as commodities.

It also requires such companies offering crypto platforms to register with the CFTC, including brokers, custodians, and exchanges. The registration would come with requirements to maintain fair pricing, prevent market manipulation, avoid conflicts of interest, and maintain “adequate financial resources,” according to a note provided by the senators.The bill’s sponsors, including Senate Agriculture Committee Chairwoman Debbie Stabenow and the panel’s Republican John Boozman, believe it would provide much-needed regulatory clarity to the cryptocurrency market, placing most of its policing under a single regulator.The fast-growing industry is now largely governed by a patchwork of regulations at the state level. In a statement, Boozman said that such measures are simply not an effective way to protect consumers from fraud.Stabenow told reporters that the bill is not intended to cover the entire cryptocurrency market or to weaken the SEC’s ability to police crypto products that function more like securities.As the window for legislative action is about to close before the November midterm elections, both Stabenow and Boozman insist they want to move the legislation forward as soon as possible, but have not set a precise timeline.