US Senator Cynthia Lummis, a staff member, believes the US Congress will have to intervene and resolve the dispute between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) over who regulates cryptocurrencies if this issue cannot be resolved domestically. .

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The problem arose in 2014 when CFTC first declared its jurisdiction over virtual currencies. This was later confirmed by a U.S. Federal Court decision in 2018stating that the CFTC has jurisdiction to prosecute criminals in virtual currency fraud cases. However, to date, it is the SEC that has been mainly involved in the investigation of crypto exchanges and crypto assets in the United States.

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On August 3, Senators Debbie Stabenow (Michigan) and John Boozman (Arkansas) introduced the Digital Consumer Protection Act of 2022. (DCCPA). If the bill is passed by the US legislature, the CFTC will have the power to regulate digital goods.

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Specifically, the DCCPA will classify bitcoin (BTC) and ether (ETH) as digital goods rather than securities. This is especially important as SEC Chairman Gary Gensler recently said in an interview with US business news channel CNBC that BTC is the only cryptocurrency he considers a commodity:

“Some, like Bitcoin — and that’s the only thing I’m going to say because I’m not going to talk about any of these tokens, but my predecessors and others have said they are a commodity.”

But despite the tension, a Lummis staffer believes there is less than a 50% chance of passing the DCCPA bill this year:

“The only way to pass any bill this year is if a catastrophic black swan event, such as the crash of a major US stock exchange, can rally lawmakers.”

This news came after the SEC began investigation the $20 billion cryptocurrency exchange Coinbase, but a Lummis employee also said that every crypto exchange in the US is under investigation in one form or another.

Coinbase SEC investigation could have ‘serious and chilling’ implications: lawyer

According to US law, Howie The test determines whether a transaction is an investment contract (security). The test states that an investment contract exists “when money is invested in a conventional enterprise with a reasonable expectation of profiting from the efforts of others.”

If it turns out that ETH or any crypto asset falls under this definition, then crypto exchanges in the US will illegally trade securities. The SEC recently listed nine crypto assets as securities.