A new bill to establish a reporting regime for cryptocurrency exchanges is now officially before Congress.
On April 28, Glenn “GT” Thompson (R-PA) introduced the Digital Commodity Exchange Act. The DCEA would set up a reporting regime for crypto exchanges with the Commodity Futures Trading Commission.
Thompson’s announcement of the bill stated that “the DCEA builds on and complements the existing authorities of the CFTC and the Securities and Exchange Commission. It helps close regulatory loopholes that have created market uncertainty and discouraged innovation in the United States.”
Co-sponsors of the bill alongside Thompson are Reps. Ro Khanna (D-CA), Tom Emmer (R-MN) and Darren Soto (D-FL).
The CFTC, by name, traditionally regulates futures trading rather than cash markets, with its primary authority over cash markets taking the form of enforcement actions. The DCEA includes a reporting regime that would provide more ongoing regulatory oversight but, importantly, would not prevent exchanges from operating in the United States without such registration. It would be a voluntary scheme.
It would also appear to bar the Securities and Exchange Commission from authority over crypto exchanges, an authority that SEC Chairman Gary Gensler has sought for much of the past year. “The Commission has exclusive jurisdiction over any agreement, contract or transaction involving a contract for the sale of a digital product in interstate commerce,” the DCEA reads.
In November, Thompson began circulating a draft of the same bill. The updated bill retains most of the main precepts of the original, with the notable addition of another voluntary regime for token developers to register with the CFTC, which would target initial registrations.
The House Agriculture Committee governs the CFTC on the House side. There is no related bill before the Senate Agriculture Committee, but that committee also seemed receptive to pressure from CFTC Chairman Rostin Behnam to regulate cryptocurrency markets.
A key sticking point is likely the optional nature of this reporting regime, which is popular in many Republican crypto laws, but which critics say leaves loopholes that companies could easily exploit to avoid scrutiny. It is therefore important to note the presence of bipartisan co-sponsorship.
© 2022 The Block Crypto, Inc. All rights reserved. This article is provided for informational purposes only. It is not offered or intended for use as legal, tax, investment, financial or other advice.
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Congressman Introduces Digital Commodity Exchange Act To Implement CFTC Regime For Crypto Exchanges
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