Global Courant
Rep. Patrick McHenry, a North Carolina Republican and leading member of the House Financial Services Committee, speaks at a hearing in Washington, D.C.
Andrew Harrer | Bloomberg | Getty Images
Republican lawmakers released a bill on Friday that would provide crypto assets and exchanges with a clearer regulatory plan, allow digital assets to be traded on more conventional trading platforms and introduce a division of powers between the two largest US financial regulators.
The discussion draft was co-written by Representatives Patrick McHenry, RN.C., and Glenn Thompson, R-Pa., and would grant the Commodity Futures Trading Commission explicit spot market authority over crypto commodities under existing law.
The Securities and Exchange Commission would regulate securities on digital assets.
The bill would “ban the SEC” from preventing an alternative trading system, or ATS, from listing crypto securities and would require the SEC to “modify its rules to allow broker-dealers to hold digital assets,” it said. An provisional version resume.
The bill proposes a clearer path for the registered offering and sale of digital assets. The SEC has several enforcement actions against U.S. crypto entities — including Gemini, Genesis, and Kraken — based on the companies engaged in the unregistered offering and sale of securities.
An important exception for DeFi – or decentralized finance – assets would allow SEC-certified assets to be exempt from registration as securities.
Crypto exchanges have called for regulatory clarity in the wake of extensive enforcement action that has companies and developers scrambling to move their operations outside of US crypto exchanges Coin base and Gemini have both announced offshore exchange operations.
Coinbase is also engaged in a bloody courtroom battle with the SEC over the very issues that apparently prompted the McHenry-Thompson Act. The crypto exchange received a notice from Wells earlier this year, warning of imminent enforcement action, from the SEC.
The bill is likely to be reformed and amended in the coming weeks and months, but it represents strong support from two influential Republican members.
