the senators Kirsten Gillibrand Y Cynthia Lummis they believe that most altcoins will probably be considered securities under its proposed new legislation, but they confirmed that Bitcoin (BTC) and Ether (ETH) will be classified as commodities.
Both Lummis and Gillibrand agreed with Securities and Exchange Commission Chairman Gary Gensler’s assessment that most cryptocurrencies are securities under the Howey test, with Gillibrand stating:
“Most cryptocurrencies go to the SEC […] Bitcoin and Ether would certainly be commodities, and that is agreed upon. That is in agreement with Chairman Gensler, as well as with the Chairman of the CFTC.”
Gillibrand rejected reports characterizing the legislation as if the CFTC were the main regulator. “I don’t think the CFTC is the main regulator,” said. “It only has an obligation to regulate Bitcoin and Ether, the biggest cryptocurrencies today.”
Both made the comments during a Washington Post event on June 8, the day after the details of the Responsible Financial Innovation Act were released.
.@SenLummis tells @ToryNewmyer“The CFTC, although it will have the lion share by market cap, the majority of the digital assets…have characteristics of securities that will require the SEC’s disclosure capabilities….The SEC’s role in this is absolutely critical.” pic.twitter.com/1B0wnQQ62p
—Washington Post Live (@PostLive) June 8, 2022
Rostin Behnam, Chairman of the Commodity Futures Trading Commission (CTFC), was also at the event and took a slightly different view on the proportion of altcoins that are securities. He said that while there are “probably hundreds” of currencies that replicate securities, there are also many commodity currencies, such as Bitcoin (BTC) and Ether that should be regulated by the CFTC.
“It’s pretty clear that a lot of the digital assets themselves replicate or resemble commodities. They’re more like stores of value than securities.”
Tony Tuthshead of the digital assets team at KPMG Tax, told Cointelegraph that the legislation, in its current form it is unlikely to “break through” in the foreseeable future, adding that it was unclear which coins will ultimately fall under the purview of the SEC versus the CTFC.
“On regulation, the legislation requires the CFTC to be the primary regulator, but below is a wide swath of tokens that have securities-like attributes for regulation by the SEC. It’s in the SEC bucket, but it could be the exception that swallows the rule.”
The new bipartisan bill is expected to lean heavily on the Howey test to determine whether a particular currency is classified as a security or commodity.
“We are trying to fit the world of digital assets into our current regulatory framework. […] We spent a lot of time defining the modern Howey test,” Sen. Lummis said during an interview on CNBC on June 7.
The Howey Test is a framework established by the US Supreme Court to determine whether a transaction can be considered an investment contract and therefore a security.
The Howey test has become a focal point in the SEC case against Ripple that began in December 2020, alleging that the company used its XRP digital token to raise funds in 2013, and it was an unregistered security token at that time. moment.
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