Senators Kirsten Gillibrand and Cynthia Lummis believe that most altcoins are likely to be considered securities under their proposed new legislation, but have confirmed that Bitcoin (BTC) and Ether (ETH) will be classified as commodities.

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Lummis and Gillibrand agreed with Securities and Exchange Commission Chairman Gary Gensler’s assessment that most cryptocurrencies are securities that have passed the Howey test, with Gillibrand stating:

“Most cryptocurrencies get into the SEC […] Bitcoin and Ethereum will certainly be commodities and this is agreed. This is agreed with Chairman Gensler and also with the Chairman of the CFTC.”

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Gillibrand rejected reports in which the legislation characterizes the CFTC as the primary regulator. “I don’t think the CFTC is the main regulator,” she said. “They simply have to regulate bitcoin and ether, most of today’s cryptocurrencies.”

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The couple made the comments during a Washington Post event on June 8, the day after details of the Responsible Financial Innovation Act were unveiled.

Rostin Behnam, chairman of the Commodity Futures Trading Commission (CTFC), also attended the event and expressed a slightly different view on the proportion of altcoins that are securities. He said that while there are “probably hundreds” of coins that replicate safecoins, there are also many commodity coins like bitcoin (BTC) and ether that should be regulated by the CFTC.

“It is very clear that many digital assets themselves reproduce or look like commodities. They are more like a store of value than securities.”

Tony Toots, head of digital assets at KPMG Tax, told Cryptooshala that the legislation as it stands is unlikely to “move forward” in the foreseeable future, adding that it’s not clear which coins will eventually fall under the SEC’s purview. compared to CTFC.

“From a regulatory standpoint, the legislation requires the CFTC to be the primary regulator, but then allocates a wide range of tokens that have attributes similar to securities to SEC regulation. It will be difficult to decipher what exactly is in the SEC bucket, but this could be the exception that swallows the rule. “

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The new bipartisan bill is expected to rely heavily on the Howey test to determine whether a particular coin is classified as a security or a commodity.

“We are just trying to fit the world of digital assets into our current regulatory framework. […] We spent a lot of time defining the modern Howey test,” Sen. Lummis said in an interview with CNBC on June 7.

The Howey Test is a system established by the U.S. Supreme Court to determine whether a transaction qualifies as an investment contract and therefore is considered a security.

The Howey test became the centerpiece of the SEC case against Ripple that began in December 2020, alleging that the company used its XRP digital token to raise funds in 2013 and was an unregistered security token at the time.