crypto laws

House committee passes bill to ‘preserve US leadership’ in blockchain

The pro-crypto bill is one of many before Congress that aims to promote the country’s deployment and use of blockchain technology.

A United States Congress committee has unanimously passed a pro-blockchain bill, which would task the U.S. commerce secretary with promoting blockchain deployment and thus potentially increasing the country’s use of blockchain technology.

On Dec. 5, the House Committee on Energy and Commerce voted 46–0 to pass H.R. 6572, the Deploying American Blockchains Act of 2023, in a session aiming to clear 44 pieces of legislation.

The 13-page blockchain bill would direct Secretary of Commerce Gina Raimondo to “take actions necessary and appropriate to promote the competitiveness of the United States related to the deployment, use, application, and competitiveness of blockchain technology or other distributed ledger technology.”

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House Committee passes bill to ‘preserve U.S. leadership’ in blockchain

The pro-crypto bill is one of many before Congress that aims to promote the country’s deployment and use of blockchain technology.

A United States House Committee has unanimously passed a pro-blockchain bill, which would task the U.S. commerce secretary to promote blockchain deployment and thus potentially increase the country’s use of blockchain technology.

On Dec. 5, the House Committee on Energy and Commerce voted 46-0 to pass H.R. 6572, the Deploying American Blockchains Act of 2023, in a session aiming to clear 44 pieces of legislation.

The 13-page blockchain bill would direct Secretary of Commerce Gina Raimondo to “take actions necessary and appropriate to promote the competitiveness of the United States related to the deployment, use, application, and competitiveness of blockchain technology or other distributed ledger technology.”

Read more

​​Stablecoins and Ether are ‘going to be commodities,’ reaffirms CFTC chair

In the tug-of-war between the United States regulators over control of crypto assets, the Commodity Futures Trading Commission chair has tripled-down on his stance that Ether and stablecoins are commodities.

Stablecoins and Ether (ETH) are commodities that should come under the purview of the United States Commodity Futures Trading Commission, its chairman has again asserted at a recent Senate hearing.

At the March 8 Senate Agricultural hearing, CFTC chair Rostin Behnam was asked by Senator Kirsten Gillibrand about the differing views held by the regulator and the Securities and Exchange Commission following the CFTC’s 2021 settlement with stablecoin issuer Tether. Behnam replied:

“Notwithstanding a regulatory framework around stablecoins, they’re going to be commodities in my view.”

“It was clear to our enforcement team and the commission that Tether, a stablecoin, was a commodity,” he added.

In the past, the CFTC has asserted that certain digital assets such as Ether, Bitcoin (BTC) and Tether (USDT) were commodities — such as in its lawsuit against FTX founder Sam Bankman-Fried in mid-December.

Asked what evidence the CFTC would put forward to win regulatory influence over Ether during the Senate hearing, Behnam said it “would not have allowed” Ether futures products to be listed on CFTC exchanges if it “did not feel strongly that it was a commodity asset,” adding:

“We have litigation risk, we have agency credibility risk if we do something like that without serious legal defenses to support our argument that [the] asset is a commodity.”

The comment has seemingly cemented Behnam’s sometimes wavering opinion on the classification of Ether. During an invite-only event at Princeton University in November last year he said Bitcoin was the only cryptocurrency that could be viewed as a commodity, leaving out Ether. Only a month before that, he suggested Ether could be viewed as a commodity too.

Related: CFTC continues to explore digital asset policy considerations in MRAC meeting

Behnam’s most recent comments oppose a view held by SEC chair, Gary Gensler, who claimed in a Feb. 23 New York Magazine interview that “everything other than Bitcoin” is a security, a claim that was rebuffed by multiple crypto lawyers.

The differing viewpoints of the market regulators could set the stage for a conflict as each vies for regulatory control of the crypto industry.

In mid-Febuary, the SEC flexed its authority against stablecoin issuer Paxos saying it may sue the firm for violating investor protection laws alleging its Binance USD (BUSD) stablecoin is an unregistered security.

Around the same time, the regulator similarly targeted Terraform Labs and called its algorithmic stablecoin TerraUSD Classic (USTC) a security, a move Delphi Labs general counsel, Gabriel Shapiro, said could be a “roadmap” for how the SEC could structure future suits against other stablecoin issuers.

The SEC’s crypto clampdowns have seen pushback from the industry. Circle founder and CEO Jeremy Allaire said he doesn’t believe “the SEC is the regulator for stablecoins,” saying they should be overseen by a banking regulator.

SEC’s ‘one-dimensional’ approach is slowing Bitcoin progress: Grayscale CEO

Grayscale’s chief was the latest to take a swing at the authority for its so-called “regulation by enforcement” actions.

The approach to crypto regulatory enforcement by the United States Securities and Exchange Commission (SEC) has stalled the advancement of Bitcoin (BTC) in the country, according to the CEO of Grayscale Investments.

In a letter published in The Wall Street Journal on Jan. 23, the chief of the cryptocurrency asset management firm, Michael Sonnenshein, said he agreed with an assertion that the SEC was “late to the game” regarding crypto regulation and preventing the bankruptcy of FTX, adding:

“‘Late’ doesn’t capture what transpired here. The problem is the Securities and Exchange Commission’s one-dimensional approach of regulation by enforcement.”

Grayscale is currently suiting the SEC for denying the conversion of its Bitcoin trust to a spot-based exchange-traded fund (ETF).

He clarified the SEC “should certainly try to eliminate bad actors” but it shouldn’t hinder “efforts to develop appropriate regulation.”

The inaction by the regulator to stop such bad actors from entering the crypto industry “prevented Bitcoin’s advancement into the U.S. regulatory perimeter,” Sonnenshein wrote.

This has forced American investors to use offshore crypto businesses “with less protection and oversight,” he said.

“We are seeing the consequences of the SEC’s priorities play out in real-time — at the expense of U.S. investors.”

Cointelegraph has reached out to the Securities and Exchange Commission for comment.  

Sonnenshein’s opinion piece comes as Grayscale is suing the SEC for having “arbitrarily denied” Grayscale’s plans to convert its Grayscale Bitcoin Trust (GBTC) to a spot ETF.

The SEC argued that Grayscale’s proposal did not sufficiently protect against fraud and manipulation. Grayscale countered by saying that the SEC was arbitrarily treating spot-traded products differently from futures-traded products.

Grayscale is owned by the crypto conglomerate Digital Currency Group (DCG), which is currently undergoing financial difficulties.

DCG also owns the bankrupt Genesis Trading, which was charged by the SEC on Jan. 12 for allegedly selling unregistered securities.

Related: SEC leaked crypto miners’ personal information during investigation: Report

Over the weekend, John Reed Stark, a crypto skeptic and former SEC chief, lambasted the term “regulation by enforcement,” labeling it a “Bogus Big Crypto Catch Phrase.”

In a Jan. 22 post on Linkedin, he said the term was a “misguided, deflective effort designed to tap into sympathetic libertarian and anti-regulatory mores,” and called it “utter nonsense.”

He argued that “litigation and SEC enforcement are actually how securities regulation works.”

FTX fall was ‘incredibly damaging,’ crypto must foster real utility: Ripple policy lead

Ripple’s APAC policy director said the collapse of FTX is exactly why crypto needs to move away from “hype cycles” and towards “real utility.”

Ripple’s APAC Policy Director has described the fall of FTX as “incredibly damaging” for the crypto space, but says the industry should stand the test of time if its focus shifts towards building “real utility.”

In a statement sent to Cointelegraph, Ripple’s APAC policy lead Rahul Advani said he expects the FTX saga to lead to greater scrutiny on crypto regulations, while governments will re-evaluate “their stance towards crypto and blockchain technology,” adding:

“The collapse of FTX is incredibly damaging for the crypto space and once again underscores the need for greater regulatory clarity.”

Advani argued that the industry will need forward-looking and “flexible” regulations to boost confidence in the crypto sector while protecting consumers.

“[These regulations] must include robust measures for consumer protection but also recognize the different risks posed by business-facing crypto companies.”

“What we don’t want to see is a knee-jerk response that could stifle innovation within the sector,” he added.

Following the collapse of FTX, a number of regulators around the world pledged to focus on developing greater crypto regulation.

The Australian government is doubling down on its commitment to a crypto regulatory framework and the International Monetary Fund (IMF) called for more regulation in Africa’s crypto markets, one of the fastest-growing in the world.

Meanwhile, United States Commodity Futures Trading Commission (CFTC) commissioner Summer Mersinger said on Nov. 18 that the time to act on crypto regulation may have arrived, prompting experts to warn that crypto is in the crosshairs of U.S. lawmakers.

Advani however noted that a “one size fits all” approach to regulation “will not work” due to differing risk profiles presented by crypto companies. He instead advocated for a “risk-based approach” to regulating the industry.

He added that risks posed by crypto businesses include requirements on conduct, like segregating business accounts, disclosing conflicts of interest, and providing “retail investor safeguards.”

Related: After FTX: Defi can go mainstream if it overcomes its flaws

“We still firmly believe that crypto is here to stay and that real use cases will withstand the test of time,” Advani said. 

“I think that the crypto industry will have to take a more focused approach, shifting from hype cycles toward building real utility.”

FTX fall was ‘incredibly damaging,’ crypto must foster real utility — Ripple policy lead

Ripple’s APAC policy director said the collapse of FTX is exactly why crypto needs to move away from “hype cycles” and toward “real utility.”

Ripple’s APAC policy director has described the fall of FTX as “incredibly damaging” for the crypto space, but says the industry should stand the test of time if its focus shifts toward building “real utility.”

In a statement sent to Cointelegraph, Ripple’s APAC policy lead Rahul Advani said he expects the FTX saga to lead to greater scrutiny on crypto regulations, while governments will re-evaluate “their stance towards crypto and blockchain technology,” adding:

“The collapse of FTX is incredibly damaging for the crypto space and once again underscores the need for greater regulatory clarity.”

Advani argued that the industry will need forward-looking and “flexible” regulations to boost confidence in the crypto sector while protecting consumers:

“[These regulations] must include robust measures for consumer protection but also recognize the different risks posed by business-facing crypto companies.”

“What we don’t want to see is a knee-jerk response that could stifle innovation within the sector,” he added.

Following the collapse of FTX, a number of regulators around the world pledged to focus on developing greater crypto regulation.

The Australian government is doubling down on its commitment to a crypto regulatory framework, and the International Monetary Fund (IMF) called for more regulation in Africa’s crypto markets, one of the fastest-growing in the world.

Meanwhile, United States Commodity Futures Trading Commission (CFTC) commissioner Summer Mersinger said on Nov. 18 that the time to act on crypto regulation may have arrived, prompting experts to warn that crypto is in the crosshairs of U.S. lawmakers.

Advani, however, noted that a “one size fits all” approach to regulation “will not work” due to differing risk profiles presented by crypto companies. He instead advocated for a “risk-based approach” to regulating the industry.

He added that risks posed by crypto businesses include requirements on conduct, like segregating business accounts, disclosing conflicts of interest and providing “retail investor safeguards.”

Related: After FTX: Defi can go mainstream if it overcomes its flaws

“We still firmly believe that crypto is here to stay and that real use cases will withstand the test of time,” Advani said:

“I think that the crypto industry will have to take a more focused approach, shifting from hype cycles toward building real utility.”

‘Secretly circulating’ draft crypto bill could be a ‘boon’ to DeFi

A crypto bill that industry advocates previously said would “kill DeFi” has seen an updated draft released online, with one commentator saying the U.S. is “finally getting their act together.”

A new draft of the Digital Commodities Consumer Protection Act (DCCPA) bill has started to circulate online, with some commentary suggesting it could be positive for decentralized finance (DeFi) and crypto.

A prior draft version of the bill drew heavy criticism from industry representative bodies for containing too broad a definition for a “digital commodity platform,” which “could be interpreted as a ban on decentralized finance (DeFi).”

In a newly posted 31-page draft bill shared by Delphi Labs’ general counsel Gabriel Shapiro, the lawyer said he made the draft bill publicly available as he believes in “transparency and open discussion.”

Shapiro remarked on a section amending the meaning of a “digital commodity trading facility” which excluded persons who develop or publish software, commenting that it “could be a boon” to DeFi and crypto.

Martin Hiesboeck, head of research at crypto exchange UpHold, tweeted that the newly released draft seems to follow similar regulations in the European Union and the United Kingdom, suggesting that the United States is “finally getting their act together.”

The comments are a change of tone from the previous version of the bill, which was described by Web3 incubator and advocacy group Alliance DAO as one that “kills DeFi.”

The decentralized autonomous organization (DAO) wrote that the bill “creates a compliance architecture that precludes the concept of a system of smart contracts operating decentralized infrastructure with little or no reliance on human activity,” as it required people to enforce compliance with the regulations.

Related: ‘Time is not on our side’ to provide regulatory clarity on crypto — US lawmaker

There have long been calls for regulatory clarity regarding digital assets in the United States, with some calling on the U.S. Congress to pass legislation defining commodities and giving jurisdiction to the CFTC.

First introduced in August the DCCPA extends the regulatory power of the Commodities Future Trading Commission (CFTC) on the cryptocurrency industry and attempts to define certain cryptos, such as Bitcoin (BTC) and Ether (ETH) as commodities rather than securities.

Draft US stablecoin bill would ban new algo stablecoins for 2 years

It’s reported the bill’s definition will cover “endogenously collateralized stablecoins,” which depend on the value of an attached cryptocurrency from the same creator for it to maintain a stable price.

Draft legislation in the United States House of Representatives would place a two-year ban on new algorithmic stablecoins such as TerraUSD Classic (USTC), which depegged from the U.S. dollar earlier this year, causing widespread crypto market contagion.

The bill would criminalize the creation or issuance of new “endogenously collateralized stablecoins,” according to a current draft of the legislation obtained by Bloomberg.

However, the legislation includes a grace period of two years for existing algorithmic stablecoin providers to change their models and collateralize their offerings differently.

The definition would reportedly cover stablecoins that depend on the value of another virtual asset from the same creator to maintain its price and is marketed as having the ability to be converted, repurchased or otherwise redeemed for a fixed price.

The bill raises concerns over whether stablecoins such as Synthetix USD (SUSD) would fall under the definition, as it is currently collateralized with the native asset of the same protocol in the SNX token. Other algo-stablecoins with a similar structure include BitUSD which is backed by BitShares (BTS).

The draft bill also mandates the U.S. Treasury to undertake a study on algorithmic stablecoins and consult with the Federal Reserve, the Securities and Exchange Commission, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency.

It’s possible the panel could vote on the bill as early as next week, as Bloomberg reports people familiar with the legislation state Democratic Representative Maxine Waters and Republican Patrick McHenry have been working to reach an agreement on the legislation, although it’s unknown if McHenry approved the latest draft.

Related: The crypto industry can trust Cynthia Lummis to get regulation right

Waters Chairs the House Financial Services Committee, of which McHenry is a ranking member, both heard testimony at a hearing Tuesday that USD-backed stablecoins could enhance national security due to the perceived prestige and reliability of the dollar.

USTC, formerly known as TerraUSD (UST) is an algorithmic stablecoin that lost its 1:1 peg with USD in early May, hitting an all-time low of $0.006 in mid-June, resulting in tens of billions of dollars worth of losses.