US Senators Reveal Details of Cryptocurrency Regulation Bill

The bill, designed to provide clarity to cryptocurrency regulation, would grant the CFTC additional powers and incorporate the definitions of securities used by the SEC. The authors, Senators Cynthia Lummis and Kirsten Gillibrand, told Politico.

The sweeping document — from taxation to consumer protection — began in December 2021.

The initiative envisages the creation of a supervisory body charged with regulating the market. Its duties would include issuing rulings as the industry evolves. Earlier reports said the agency’s powers would be split between the SEC and the CFTC.

The senators said they plan to create a system for classifying digital assets as securities, commodities, or to form a wholly new framework. In addition, rules for stablecoin issuers are expected.

The bill would also clarify the definition of a broker in the infrastructure plan adopted by President Joe Biden.

Based on the wording of the latter, it could follow that miners, node operators, wallet developers, DeFi liquidity providers and other non-custodial actors would begin reporting to the IRS about their users’ activity.

In February, the U.S. Treasury stated that they would not extend this requirement to “auxiliary parties that do not have access to information required by the Internal Revenue Service.”

“The broker definition has been changed to reflect what is actually happening with software developers, miners, validators, and so on,” said Lummis.

The bill is expected to be introduced for consideration in the coming weeks. After committee review and potential amendments, a vote could take place by the end of the year, Gillibrand told The Block.

On March 9, Joe Biden signed an executive order coordinating federal agencies in regulating cryptocurrencies.

The Biden administration had previously asked cryptocurrency exchanges to help prevent the use of crypto to evade sanctions by Russian individuals and entities.

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