A discussion draft of the bill names the United States CFTC, SEC, and FinCEN as regulators.
After long days of impeachment hearings and a vote to initiate an impeachment trial in the US Senate, it’s clear that the US Congress has had a busy week. However, in the midst of the largely partisan debates, a new bill outlining a set of regulations for digital currencies was introduced.
Forbes reported that the bill, dubbed the ‘Crypto-Currency Act of 2020,’ has the stated objective to clarify which federal agencies are responsible for the regulation of digital assets.
Indeed, a discussion draft of the bill assigns a definition of ‘Federal Digital Asset Regulator’ or ‘Federal Crypto Regulator’ to three agencies - the Commodity Futures Trading Commission (CFTC), the Securities and Exchange Commission (SEC), and the Financial Crimes Enforcement Network (FinCEN).
Outlining definitions and setting watchdogs for crypto
Under the bill, digital assets would be sorted into three different categories: Cryptocurrencies, crypto-commodities, and crypto-securities.
As defined by the draft, the term “cryptocurrency” s defined as “representations of United States currency or synthetic derivatives resting on a Blockchain or decentralized cryptographic ledger.” This can be determined by “decentralized oracles or smart contracts” and “collateralized by crypto-commodities, crypto-currencies, or other crypto-securities.”
The term “crypto-securities,” on the other hand, is defined as “all debt, equity, and derivative instruments that rest on a blockchain or decentralized cryptographic ledger,” with some exceptions, including synthetic derivatives that are operated under money services businesses.
The term “digital asset” is defined as “a crypto-commodity, crypto-currency, or crypto-security.” The draft of the bill also provided definitions for synthetic stablecoins, reserve-backed stablecoins, and decentralized oracles.
The roles of FinCEN, the CFTC, and the SEC would be made clearer
The draft of the bill places “crypto-commodities” under the jurisdiction of the US Commodity Futures Trading Commission (CFTC), and puts “crypto-currencies” until the Secretary of the Treasury (operating through the Financial Crimes Enforcement Network, or FinCEN). “Crypto-securities” are under the US Securities and Exchange Commission (SEC).
In a report for Forbes, former FDIC regulator Jason Brett wrote that “this is not the first sign that there may be a common role between [the three regulators] for this new asset class,” and pointed to an October statement by all three entities on activities involving digital assets with respect to their obligations under the Bank Secrecy Act.
Brett also pointed out that FinCEN “is generally considered more of a law enforcement agency than a traditional financial services regulator,” and cited FinCEN Director Kenneth Blanco, who explained at a New York Blockchain Symposium in November that for FinCEN exams,
"You should be able to tell your examiner, and/or your regulator like FinCEN, how you mitigate risks...identify potentially suspicious activity and comply with reporting and recordkeeping requirements — including the Funds Travel Rule,' he said. "You can count on being asked about this during an examination.’
If passed into law, the bill would represent a step toward regulatory clarity for the cryptocurrency industry in the United States. The US has been criticized in the past for lacking regulations for the crypto industry.
However, efforts toward regulating crypto seem to have picked up speed within the country over the last several months, particularly following Facebook’s announcement of the so-called “Libra” project, a plan to build a global cryptocurrency network.
Some of the actions taken by the SEC in the last several months and over the last year have caused some to accuse the agency of “regulation by enforcement.”
After long days of impeachment hearings and a vote to initiate an impeachment trial in the US Senate, it’s clear that the US Congress has had a busy week. However, in the midst of the largely partisan debates, a new bill outlining a set of regulations for digital currencies was introduced.
Forbes reported that the bill, dubbed the ‘Crypto-Currency Act of 2020,’ has the stated objective to clarify which federal agencies are responsible for the regulation of digital assets.
Indeed, a discussion draft of the bill assigns a definition of ‘Federal Digital Asset Regulator’ or ‘Federal Crypto Regulator’ to three agencies - the Commodity Futures Trading Commission (CFTC), the Securities and Exchange Commission (SEC), and the Financial Crimes Enforcement Network (FinCEN).
Outlining definitions and setting watchdogs for crypto
Under the bill, digital assets would be sorted into three different categories: Cryptocurrencies, crypto-commodities, and crypto-securities.
As defined by the draft, the term “cryptocurrency” s defined as “representations of United States currency or synthetic derivatives resting on a Blockchain or decentralized cryptographic ledger.” This can be determined by “decentralized oracles or smart contracts” and “collateralized by crypto-commodities, crypto-currencies, or other crypto-securities.”
The term “crypto-securities,” on the other hand, is defined as “all debt, equity, and derivative instruments that rest on a blockchain or decentralized cryptographic ledger,” with some exceptions, including synthetic derivatives that are operated under money services businesses.
The term “digital asset” is defined as “a crypto-commodity, crypto-currency, or crypto-security.” The draft of the bill also provided definitions for synthetic stablecoins, reserve-backed stablecoins, and decentralized oracles.
The roles of FinCEN, the CFTC, and the SEC would be made clearer
The draft of the bill places “crypto-commodities” under the jurisdiction of the US Commodity Futures Trading Commission (CFTC), and puts “crypto-currencies” until the Secretary of the Treasury (operating through the Financial Crimes Enforcement Network, or FinCEN). “Crypto-securities” are under the US Securities and Exchange Commission (SEC).
In a report for Forbes, former FDIC regulator Jason Brett wrote that “this is not the first sign that there may be a common role between [the three regulators] for this new asset class,” and pointed to an October statement by all three entities on activities involving digital assets with respect to their obligations under the Bank Secrecy Act.
Brett also pointed out that FinCEN “is generally considered more of a law enforcement agency than a traditional financial services regulator,” and cited FinCEN Director Kenneth Blanco, who explained at a New York Blockchain Symposium in November that for FinCEN exams,
"You should be able to tell your examiner, and/or your regulator like FinCEN, how you mitigate risks...identify potentially suspicious activity and comply with reporting and recordkeeping requirements — including the Funds Travel Rule,' he said. "You can count on being asked about this during an examination.’
If passed into law, the bill would represent a step toward regulatory clarity for the cryptocurrency industry in the United States. The US has been criticized in the past for lacking regulations for the crypto industry.
However, efforts toward regulating crypto seem to have picked up speed within the country over the last several months, particularly following Facebook’s announcement of the so-called “Libra” project, a plan to build a global cryptocurrency network.
Some of the actions taken by the SEC in the last several months and over the last year have caused some to accuse the agency of “regulation by enforcement.”
Rachel is a self-taught crypto geek and a passionate writer. She believes in the power that the written word has to educate, connect and empower individuals to make positive and powerful financial choices. She is the Podcast Host and a Cryptocurrency Editor at Finance Magnates.
Bitget's Bitcoin Reserve Ratio Soars Over 300% Following Halving
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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