On Thursday, July 20, the US House of Republicans introduced a new bill addressing the regulatory uncertainties in the crypto sector. The “Financial Innovation and Technology for the 21st Century Act” stressed on enactment of practical regulatory framework that safeguards investors from exploitative businesses.
Commenting on the 212-page bill, the House Committee on Agriculture chairman, Glenn Thompson, argued that the drafted laws mark a significant step to protect the investors and consumers in the crypto sector. The executive mentioned that the bill improves American leadership in the crypto industry.
Scope of Crypto Oversight Bill
Consecutively the House Committee on Agriculture called for Congress to act on the bill. In his report, Thompson confirmed the existence of regulatory gaps between the CFTC and the SEC. The executive noted that securities laws imposed by the SEC fail to meet some digital asset features.
The bill came when firms were fleeing the US crypto markets due to a need for more regulatory clarity and the enforcement approach adopted by the regulators. Unlike previous comprehensive regulation on crypto assets, the new legislation provides well-detailed regulatory procedures for firms to register with the US Securities and exchange commission (SEC) and Commodities Futures Trading Commission (CFTC).
Last month the House of Republicans formulated the bill pushing for crypto oversight. The policymakers drafted policies enabling firms to buy and sell securities, commodities, and stablecoins at a single entry point. The bill illustrated that any activity involving buying and selling digital commodities such as Bitcoin (BTC) will not be considered securities.
In their report, the lawmakers called for new definitions of crypto assets. Also, the policymakers provide suitable conditions under which digital assets would be exempted.
House of Republican Seeks for Ammendment of US Crypto Regulation
Moreover, the House of Republicans seeks blockchain projects certified under decentralized platforms. The bill outlines principles, and the standards crypto exchanges or intermediaries should meet to operate compliantly.
According to the new legislation, all token issuers and exchanges must disclose the project’s financial position, risk factors, and development plans to the regulators. The token issuer must also provide a detailed report on their project source code.
However, the market regulators are granted powers to oppose any claims brought forward by crypto firms concerning set regulatory standards. A scrutiny of the drafted laws demonstrated that the SEC would be obliged to revise current securities law to promote innovation.
The SEC will be restricted from direct involvement in developing the design of stablecoins used in payment. Instead, the SEC will exercise control over any stablecoin payment made on their platforms.
Significance of the New Bill
Beyond this, the SEC will have new assignments in registering digital asset brokers and dealers. The bill requires the SEC to inspect brokerage and dealership firms seeking to offer crypto assets before proceeding with registration.
Soon after the submission of the House of the Republican bill, the regulators have engaged in embroiled exchanges. A defensive report from Dusty Johnson, an official at the House of Republicans, revealed that the bill will gives the CFTC and SEC powers necessary to strenghtening regulatory sanity over crypto assets.
Johnson affirmed that the bill lays out clear principles for improving financial security and supporting innovation in the crypto sector. In support of this, French Hill, one of the contributors to the bill, stated that the new legislation aims at safeguarding the interest of consumers. He added that the bill corresponds to landmark legislation fostering innovation in the US.
In Twitter, the general counsel of Delphi Labs, Gabriel Shapiro, observed that the published bill differed from the draft report issued in June. He lamented that such changes could lead to ambiguties that undermines the final bill.
After examining the bill, Shapiro realized that on page 10, the House of Republicans omitted the definition of some conventional securities such as stocks, bonds, and transferable shares. He noted that for the first time, some of the assets in the decentralized finance, including liquid staking tokens, will be regulated under the new bill.
Editorial credit: Luca Perra / Shutterstock.com
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