House Republicans introduced the long-awaited crypto legislation that would, if it passed, define for good the roles and responsibilities of the Commodity Futures Trading Commission and Securities and Exchange Commission in the oversight of cryptocurrency.
The proposed market structure law — the Financial Innovation and Technology for the 21st Century Act — establishes joint rulemaking powers between the SEC and CFTC. The bill gives the CFTC control of digital commodity markets including brokers and exchanges.
In addition, the legislation clarifies that tokens are not securities if they have an investment contract. The co-sponsors of the bill wrote that about 70% all crypto tokens would be better classified as commodities instead of securities.
Rep. French Hill of Arkansas, Rep. Thompson and Rep. Dusty Johnson (R-S.D.) Hill is the chairman of the first Subcommittee on Digital Assets, Inclusion, and Financial Technology, and Johnson heads the Subcommittee on Commodity Markets, Digital Assets, and Rural Development.
Reps. Tom Emmer, R-Minn., and Warren Davidson, R-Ohio, — both of whom have been vocal crypto advocates thus far this session — also signed on as co-sponsors.
After months of discussion, the bill was introduced. Early in June, the House Financial Services Committee held a hearing to discuss the draft law. Participants praised its goal of separating powers between SEC and CFTC.
“Over the past several months, our teams solicited extensive feedback from stakeholder and market participants, and worked diligently to produce a legislative product that aims to close existing authority gaps, ensuring U.S. leadership in financial and technological innovation,” Thompson made the statement in a Thursday press release.
House Democrats are likely to push back against the bill. Many have said that SEC has a bigger role in the legislation than it currently does.
“I did not anticipate that we would have such strong advocacy for the CFTC,” Maxine Wassers, D-Cali. said at an June hearing about how to provide regulatory clarity for the industry.
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