On August 3, Debbie Stabenow, chairman of the U.S. Senate Agriculture Committee, senior congressman John Boozman, and senators Cory Booker and John Thune introduced the 2022 Digital Goods Consumer Protection Act. Aims to regulate cryptocurrency exchanges as commodity brokers, dealers, custodians and trading facilities overseen by the Commodity Futures Trading Commission (CFTC).
The bill would create a definition of “digital goods” that would include cryptocurrencies like bitcoin and ethereum, but not anything that could be a security, enabling the CFTC to oversee digital goods transactions and enforce registration of digital goods platforms , according to the bill item-by-item breakdown. Much of the bill is devoted to detailing how these digital commodity brokers will be treated similarly to their traditional financial counterparts.
Jake Chervinsky, policy director of the Blockchain Association, a non-profit organization in the United States, analyzed that this is the third bill this year, making the CFTC the main regulator of the crypto spot market. Overall, this is a good bill and confirms the CFTC’s growing consensus on cryptocurrency regulation.
The core of the bill is to require “digital commodity platforms” such as exchanges and brokers to register with the CFTC and comply with certain rules designed to protect consumers, disclose risks and prevent manipulation. Sounds reasonable! Most people agree with this.
The bill seeks to improve upon similar proposals by the DCEA (House Ag) and RFIA (Lummis-Gillibrand) for CFTC spot jurisdiction. Secondary market regulation is a top priority for the District of Columbia, so don’t be surprised if one of these bills (or a consolidated version) becomes law next year.
The devil is in the details, Jake Chervinsky noted, and the bill does raise some questions that need to be addressed, such as whether its definition of a “digital goods platform” is too broad.
Peter Van Valkenburgh, research director at CoinCenter, said that this system will achieve many goals: (1)…