Amended Cryptocurrency Legislation Establishes Guidelines for Collaboration Between SEC and CFTC

The Senate Banking Committee has published an updated version of the Crypto Market Structure Bill, a significant step forward in regulating the cryptocurrency industry. This bill, which is now a central focus of crypto legislation in Congress, has garnered support from key senators, including Chairman Tim Scott and Senator Cynthia Lummis, who leads the crypto subcommittee. A dozen or more Democrats are also expected to vote in favour, indicating growing bipartisan support.

The updated bill aims to bring clarity to projects offering staking, DePIN, and airdrops by excluding them from securities regulations. It also confirms that ancillary digital assets are not securities, provided they are not tied to fraud. This move is a direct response to industry feedback, including input from Ripple.

One of the key features of the bill is the establishment of a Joint Advisory Committee to streamline crypto regulation. This committee, as outlined in Section 701, is designed to coordinate between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The committee's goal is to avoid overlapping actions and ensure consistent oversight, thereby fostering a collaborative and transparent regulatory environment.

The bill also mandates closer collaboration between regulators. It blocks the SEC from pursuing legal action on existing tokens unless fraud is proven. Furthermore, it incorporates the Blockchain Regulatory Certainty Act to support neutral technology development.

The Joint Advisory Committee is also tasked with setting procedures for resolving disputes between the SEC and CFTC, as outlined in Section 702 of the bill. This ensures both bodies act collaboratively and transparently on enforcement.

In a bid to further promote cooperation, both agencies plan a joint roundtable on September 29 to discuss regulatory harmonization for the crypto space. The Crypto Market Structure Bill also introduces legal protections for software developers building decentralized platforms.

However, without sufficient support, a September 30 markup deadline for the bill appears unlikely. Senator Mark Warner has emphasised that bipartisan backing is still needed for the bill to progress. The bill's success will undoubtedly have a significant impact on the future of crypto regulation in the United States.

Amended Cryptocurrency Legislation Establishes Guidelines for Collaboration Between SEC and CFTC