US Senate Agriculture Committee Introduces Bill to Regulate Crypto Spot Markets
In a significant move, the US Senate Agriculture Committee has introduced a bipartisan bill to place crypto spot markets under the supervision of the Commodity Futures Trading Commission (CFTC), aiming to provide clarity and protection for investors in the rapidly growing digital asset space.
The proposed bill, introduced by Committee Chairman John Boozman and Senator Cory Booker, builds on the CLARITY Act passed by the House of Representatives earlier this year. It seeks to expand the CFTC’s authority over crypto trading on spot markets, providing a formal registration process for crypto trading platforms and new consumer protection rules.
Key Proposals and Provisions
The bill’s key proposals include a formal registration process for crypto trading platforms, new consumer protection rules, and the requirement for digital commodity exchanges to comply with “requirements to segregate customer funds,” implement “conflict of interest safeguards,” and establish appropriate “customer disclosure requirements” and “dispute resolution procedures” to better protect retail participants.
Brokers and traders operating in the spot market would be required to register separately as “digital commodities brokers” or “digital commodities traders” depending on their activities and meet the requirements of using “qualified digital commodities custodians” when managing customer assets. The draft also contains bracketed options for exemptions, with provisions for limited exemptions for “activities of eligible contract participants” and rules that the CFTC may adopt to “effect the protection of customer assets” still under discussion.
Industry Reaction and Implications
The crypto industry has reacted positively to the bill, particularly because it protects the right to self-custody and allows individuals to “conduct direct, lawful, peer-to-peer transactions” without relying on intermediaries. The bill also clarifies a much-anticipated provision for developers and infrastructure providers, saying they “shall not be treated as money transmitters” solely for the purpose of “creating or publishing software” or “providing infrastructure support to maintain a blockchain service” as long as they do not “control, initiate upon request, or perform transactions” involving user assets.
According to Kadan Stadelmann, chief technology officer at Komodo Platform, the bill represents a turning point in the way digital assets are treated at the federal level and could bring long-awaited clarity. “This bill would be a significant development after the crypto industry’s complicated relationship with the SEC. While the CFTC views crypto as commodities, the SEC views many of them as unregistered securities – a stance that stifles innovation.”
For more information, read the full article on crypto.news.
