Republican Congressman Glenn Thompson from Pennsylvania is preparing to introduce a new cryptocurrency bill in the House of Commons this week. Thompson believes that the recent court ruling regarding Ripple will help garner support from Democrats for the legislation. According to Bloomberg News, the court ruling determined that programmatic sales of Ripple’s XRP to the public do not meet the criteria of securities sales or investment contracts under the Howey test. This ruling has the potential to impact the approach taken by the legislation towards similar cryptocurrencies.
Thompson argues that this ruling highlights the confusion within the industry regarding how securities laws apply to cryptocurrencies, emphasizing the need for lawmakers to intervene and provide clarification. He asserts that Congress must take action to offer both certainty and clarity in this matter. Thompson remains hopeful that the recent ruling will persuade lawmakers from both sides of the aisle to come together and develop a comprehensive solution to address the challenges faced by the cryptocurrency industry.
The Digital Asset Market Structure bill, co-led by Congressman Thompson and Congressman Patrick McHenry, has gained support from Congressmen French Hill and Dusty Johnson. Introduced in the House of Commons on June 2, the bill is currently undergoing a preliminary review and is scheduled for a voting phase in July. The proposed legislation aims to establish a new regulatory framework that categorizes cryptocurrencies as either securities or commodities, aiming to provide a clearer understanding of their classification within the industry. Additionally, the bill seeks to prevent non-exchange services, such as wallets and node operators, from being subjected to exchange rules.
Under the provisions of the bill, all cryptocurrencies would be classified as either commodities, to be overseen by the Commodity Futures Trading Commission (CFTC), or securities, to be regulated by the Securities and Exchange Commission (SEC). Despite these efforts, Democratic lawmakers have expressed skepticism, with some questioning the necessity of the bill, potentially obstructing its passage.
Congresswoman Maxine Waters, for instance, recently requested feedback from the Treasury and the SEC regarding the bill and whether existing securities laws adequately address the needs of the industry. Waters also pondered whether modifying current legislation would be more effective than introducing new laws. At the time of writing, there has been no public response from the Treasury or the SEC regarding Waters’ inquiry.
Congressman Glenn Thompson’s upcoming crypto bill is expected to receive support from Democrats following the recent Ripple ruling. Thompson is optimistic that the ruling will spur lawmakers to collaborate and find a viable solution to address the confusion surrounding the application of securities laws to cryptocurrencies. The Digital Asset Market Structure bill, co-led by Thompson and Congressman McHenry, aims to establish a regulatory framework that clearly defines cryptocurrencies as either securities or commodities. However, some Democratic lawmakers remain skeptical, questioning the necessity of the bill and suggesting alternative approaches.
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