Bipartisan crypto overhaul seeks to treat most digital assets as commodities and empower CFTC
As excited as Wall Street and Main Street were to have crypto as a new investment idea and store of value, the speed at which cryptocurrencies entered mainstream U.S. markets caused proportionate angst for U.S. regulators, who were equipped only with decades-old securities laws to police an industry many still refer to as the financial "Wild West."
But after months of research, industry consultation and bipartisan teamwork, Sens. Kirsten Gillibrand and Cynthia Lummis said Tuesday that they are ready to debut the first major attempt to place guardrails around the nascent industry.
Their bill, titled the Responsible Financial Innovation Act, amounts to a regulatory overhaul that would classify the vast majority of digital assets as commodities like wheat, oil or steel. As such, the bipartisan legislation would also leave the bulk of the oversight responsibility to the Commodity Futures Trading Commission and not the Securities and Exchange Commission, as some had expected.
Crucially, the bill treats all cryptocurrencies, including Bitcoin and Ethereum, as "ancillary assets" unless they behave like a security that a company might issue to pool capital – provide dividends, liquidation rights, or a financial interest in the issuer. On a similar note, the bill defines a digital asset as a natively electronic asset that offers economic or proprietary access rights. Similarly, a virtual currency is defined as a digital asset that is used primarily as a medium of exchange, unit of account, or a store of value, and is not backed by any underlying financial asset.
Thirdly, it appears that the legislation will not ban non-custodial or self-hosted crypto wallets. Finally, the bill mandates 100 percent backing for stablecoins. This is an important aspect of the legislation, given the bulwark status that stablecoins enjoy in the crypto world, and necessitated by the recent high-profile failure of Terra's algorithmic UST stablecoin. Of course, a strong stablecoin segment will allow investors to transact much more safely and conveniently with Bitcoin, Ethereum, and other cryptocurrencies.
Also at The Washington Post.
See also: Crypto lobbying hits fever pitch as Bitcoin's favorite senator finishes bill
(Score: 0, Funny) by Anonymous Coward on Tuesday June 07 2022, @11:20PM (2 children)
You dumbass crypto suckas! You be taxed out the wazoo!
Pretty clever. This is DA way to kill the crypto lunacy.
(Score: 0) by Anonymous Coward on Tuesday June 07 2022, @11:40PM
No, this is crypto money getting into Congress' pockets. One of the articles points out that all of the legal and regulatory tools to handle crypto currency exist and are in place. This is the big crypto rollers working in big loopholes for themselves so that they can be treated special (meaning, as unregulated as they can get).
(Score: 0) by Anonymous Coward on Wednesday June 08 2022, @12:04AM
Troll? Guess we got some crypto-bros here, eh?
Crypto gets recognized by the gov't and get regulated. That defeats the whole purpose, raison d'etre - excuse my french.
(Score: 0, Troll) by Anonymous Coward on Wednesday June 08 2022, @12:20AM (1 child)
She developed most of the algorithms underlying Terra's UST (apparently after she developed dementia).
(Score: 0) by Anonymous Coward on Wednesday June 08 2022, @01:31AM
If you hurry you can get in at the top floor before it collapses.
(Score: 2) by jasassin on Wednesday June 08 2022, @12:27AM (3 children)
I emailed senator John Thune asking him what his position on crypto currency was and I got an email back with a phone number to call and talk to one of his people. I didn’t remember sending the email (for reasons unknown) so I didn’t call.
I just wonder why they didn’t respond in the email.
jasassin@gmail.com GPG Key ID: 0x663EB663D1E7F223
(Score: 5, Touché) by VanessaE on Wednesday June 08 2022, @05:55AM (2 children)
The cynic in me says that they chose the phone because most people lack the means to record the conversation, whereas email is a written record, by definition.
(Score: 2, Interesting) by Anonymous Coward on Wednesday June 08 2022, @12:22PM
It might also be just a simple way to screen out all the Facebook "click here to send a letter !!!" types of mass mailings and perhaps ensure that you are not only a real person, but a person that is actually represented by the Senator.
(Score: 2, Interesting) by Anonymous Coward on Wednesday June 08 2022, @01:12PM
The best way to get a member of Congress to pay attention is with old fashioned paper mail. It's not that they're so low tech, but that since it's inconvenient and costs you money, it's more likely that you actually care.
I once worked on an astroturfing campaign, and we prepared the envelopes, stamps,and the letters "from" the constituents. All they had to do was sign the letter and lick the envelope. My job was writing the letters (each one was personalized, so it wouldn't be so obvious), so I don't know how many actually got sent in. Must have been enough, though, the campaign worked.
(Score: -1, Spam) by Anonymous Coward on Wednesday June 08 2022, @12:32AM
POUND AFTER POUND, BUBBA EXTRACTS HIS PLEASURE AND DUMPS A TRUCKLOAD OF SEMEN BALLS DEEP INSIDE YOUR RECTUM.
(Score: 0) by Anonymous Coward on Wednesday June 08 2022, @12:48AM (4 children)
Without having seen the legislation so far, the headline features make sense.
Digital assets as commodities - makes sense. Today the market's hot, tomorrow the bottom drops out. All depends on how strongly people in general give a shit, which depends on the value of what the digital aspect unlocks. Which, given how shitty most NFTs are, largely amounts to a fat fuck-you for most people.
Unbacked crypto as ancillary assets also makes sense. It has only value as an item of trade, not any intrinsic value. So far, so good.
Backed currencies have to be backed. Well, duh. Would be nice if Uncle Sam did that to the greenback.
Nothing in the summary sounds crazy so far.
(Score: 0) by Anonymous Coward on Wednesday June 08 2022, @12:56AM (3 children)
Except NFTs as an asset class. An asset is a thing with value. An NFT is something that points to a thing. How is that an asset? I can make an NFT of something you wrote. Do I own what you wrote? No, I just own some hash that says that I'm the one who made the NFT. I'll even sell it to Joe and now the blockchain says that Joe owns the NFT that I made, but Joe don't own shit but a glorified hash.
(Score: 3, Interesting) by Anonymous Coward on Wednesday June 08 2022, @03:52AM (2 children)
No, it still makes sense in that a speculative claim can still have value - specifically, the value that the market accords it. It's a bit like baseball card collectors. It's not the dude, it's not his earnings, it's not his skill, it's not his contract. It's just a picture of a dude. But people will hop, skip and jump over each other to get that sweet, sweet card. If suddenly nobody gave a shit about it, the market in baseball cards would tank.
The mystery is that anybody cares, but ... they do care.
(Score: 0) by Anonymous Coward on Wednesday June 08 2022, @04:35AM (1 child)
Do baseball cards have their own asset class, or are they covered under a more general class? Why do NFTs get special treatment (apart from hype and lobbying pressure)?
(Score: 2) by janrinok on Wednesday June 08 2022, @01:00PM
I don't know but I suppose it is that NFTs are linked by blockchain technology and usually bought and sold on the internet. Therefore there is some common ground and one of the links states that it "Recognizes NFTs as a New Asset Class". We can argue whether this should be the case but that is their justification.
It is suggested that the bill aims to provide some degree of legal security to such transactions because existing law provides no such protection:
(Score: 1, Interesting) by Anonymous Coward on Wednesday June 08 2022, @04:38PM
buying into bitcoin (or other proof of energy wastage) is financing inflation.
normal currency allows you to acquire energy (today, mostly in form of non-renewable, limited resources). if resources get scarce (non-renewable), you have to trade more of your currency for less amount of energy.
if you transfer this "value" (currency-to-energy) to a ledger that requires ever increasing energy input to function, the process of bookkeeping in itself devalues your investment.
you are driving inflation ... faster and faster.
the "energy buying capability" of money deposited in the bank 2 weeks ago will errode much faster if the ledger you are transfering this "value" to requires ever increasing energy to exist...
thanks a lot guys! i see your 50'000 bitcoins (after oil hits 200 "dollars" per barrel) and raise you two solar panels ...