Senators Stabenow, Boozman introduce crypto bill that extends CFTC’s regulatory powers

United States Senate Agriculture Committee chair Debbie Stabenow and ranking member John Boozman introduced the Digital Commodities Consumer Protection Act bill on Wednesday. The bill has been expected for several months. Like the Digital Commodities Exchange Act (DCEA) introduced into the House of Representatives by members of the House Agriculture Committee in April, the new bill enlarges the role of the Commodity Futures Trading Commission (CFTC). The new bill is not the companion to the DCEA, however.

According to the summary, the bill’s definition of digital commodities “includes Bitcoin and Ether and excludes certain financial instruments including securities,” which are regulated by the Securities and Exchange Commission (SEC). The bill mandates registration by the CFTC of a broad spectrum of market players, such as “digital commodity broker,” “digital commodity custodian,” “digital commodity dealer” and “digital commodity trading facility,” which are collectively understood to be “digital commodity platforms.” Digital commodity platforms could be cross-registered with the SEC under the bill.

In addition, the bill would require the registration of “associated persons of digital commodity brokers and digital commodity dealers.”

The bill was met with wide approval within the crypto community, mainly on Twitter. Blockchain Association policy head Jake Chervinsky called it “a good bill overall & confirms a growing consensus for CFTC regulation.” Coinbase chief policy office Faryar Shirzad said he was “really pleased to see the introduction” of the bill.

1) I’m really excited to see @SenStabenow and @JohnBoozman introduce a strong bill to bring customer protection and federal oversight to crypto.https://t.co/AJAWjOHgDy

— SBF (@SBF_FTX) August 3, 2022

CFTC chair Rostin Behnam released a statement saying “new legislative authority is needed to clarify ambiguities and provide a regulatory framework to the digital commodity market.”

The general accolades were not without notes of caution. Coin Center released a blog post expressing gratitude for the “careful approach to developing this legislation” but cautioned:

“We have reservations about the breadth of definitions for regulated activities and we believe there is a need for a clearer exemption of persons engaged in constitutionally protected activities such as publishing software.”

The DCEA also addressed digital commodity registration but left it up to…