• The U.S. Senate has released a draft bill that changes the classification of digital assets from securities to commodities.
• The proposed legislation provides criteria for a network to be considered decentralized, allowing token issuers to certify decentralization to the SEC and providing regulatory clarity.
• The bill is designed to facilitate comprehensive conversations between House committees, Senate, regulators and the private sector regarding market structure reforms.
U.S Senate Bill on Crypto Reform
The U.S Senate has released a draft bill which shifts digital assets initially classified as securities to commodities, providing regulatory clarity in the evolving landscape of cryptocurrencies. This draft bill presents an opportunity for members of the House committees, Senate, regulators and the private sector to collaborate in discussions about market structure reforms, addressing different stakeholders’ needs and concerns.
Criteria for Decentralization
The proposed legislation defines criteria for networks to be considered decentralized including an absence of unilateral authority or substantial ownership by a token issuer or affiliated person. Token issuers will have the chance to certify decentralization with the SEC but with a 30-day timeframe set by regulators for objections with a possible 90-day extension period if needed.
Two months ago SEC chair Gary Gensler highlighted that platforms should adhere existing regulations either from SEC itself or from Commodity Futures Trading Commission (CFTC). Democrats agree while crypto industry is pushing for clearer rules asking Congress’ intervention.
The new draft bill introduced by Republican chairs provides guidance on platform registration with either SEC or CFTC and mandates collaboration on defining and overseeing exchanges that are dually registered during this transition period before full compliance is achieved..
In conclusion, this new draft bill presents guidance on transitioning digital assets from being classified as securities into commodities while still ensuring compliance with existing regulations set by both SEC and CFTC when engaging with U.S investors