The U.S. Senate Agriculture Committee has tabled a draft crypto market structure bill that has garnered support from David Sacks, the White House crypto czar. The bill, introduced by Senate Agriculture Committee chairman John Boozman and Senator Cory Booker, proposes to hand the oversight of the crypto market to the CFTC, slashing SEC’s involvement.
The Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) are both regulatory agencies in the U.S. with separate roles and responsibilities. While the CFTC regulates the commodities markets (wheat, oil, crypto derivatives), the SEC oversees the securities markets like stocks and bonds. Both agencies work on preventing market fraud and safeguarding the investors.
What is the Crypto Market Structure bill?
The bill reportedly defines digital commodities as “any fungible digital asset that can be exclusively possessed and transferred, person to person, without necessary reliance on an intermediary, and is recorded on a cryptographically secured public distributed ledger.”
The bill sponsors believe that the CFTC should solely regulate spot-market trading in digital commodities like non-security crypto tokens including Bitcoin. It says a dedicated funding stream for CFTC must be established to support the agency’s spot market regulatory regime.
As of now, the SEC does oversee a major part of crypto trading in the U.S. despite a major chuck of these assets not even qualifying as securities. The proposed market structure bill aims to put an end to this debate and give more regulatory authority around crypto to the CFTC.
The proposal, furthermore, lays rules for crypto trading platforms to register with the CFTC and agree to put in place measures around fund segregation, dispute resolution, record-maintaining, and anti-fraud. The registration rules would differ for brokers and dealers, under the proposed rules.
What’s next for this crypto regulation?
Commenting on the proposed bill, President Donald Trump’s crypto czar Sacks said, “The Senate Ag Committee has released a bipartisan draft of market structure legislation. We are a major step closer to providing the regulatory clarity needed to make the U.S. the crypto capital of the world.”
For now, the bill has skipped on detailing its provisions around DeFi oversight, anti-money laundering rules, and CFTC discretion among other topics. The sponsors are seeking feedback on certain topics for now.
For now, it remains unclear if the bill will come close to being finalized before the end of the year.
Under U.S. President Donald Trump, the country is expecting to undergo multiple policy changes to accommodate the digital assets industry within the national financial fabric. President Trump envisions the U.S. to become the crypto capital of the planet under his leadership. Presently, the SEC is working to revamp existing rules to make them more aligned with the needs of the crypto business and reshore those who left the nation owing to legal uncertainties.