Digital assets, such as Bitcoin and other cryptocurrencies, should not be regulated by the SEC and should be left to the jurisdiction of the Commodity and Futures Trading Commission (CFTC), according to Florida Congressman Darren Soto.
Congressman Calls for Better Classification of Digital Assets
Darren Soto, a Democratic party representative for Florida’s 9th district, has called for better classification of digital assets including Bitcoin and other cryptocurrencies. In an interview with Cheddar on Jan. 10th, the congressman shared his views on the future of digital assets in the U.S, saying that more regulation was necessary in order to protect the market.
“Securities laws can be very intense and hurt the market unless it’s truly a security,” Soto said. “Overall, we hope to establish jurisdiction and classifications so we can bring confidence and clarity into the market.”
According to Soto, cryptocurrencies should not fall under the jurisdiction of the Securities and Exchange Commission. Instead, digital assets should ideally be regulated by the U.S. Commodity Futures Trading Commission, the country’s main futures and options market regulator.
The second bill, titled “The U.S. Virtual Currency Market and Regulatory Competitiveness Act of 2018,” issued policy recommendations that would better accommodate the crypto market in the U.S.Soto cited his experience in crafting bills regarding cryptocurrencies for his views. Back in December 2018, Soto introduced two crypto bills with Representative Warren Davidson of Ohio. The first one, “The Virtual Currency Consumer Protection Act of 2018,” calls for the CFTC to research price manipulation in cryptocurrencies and establishes when a crypto asset qualifies as a security, Cheddar reported.
Federal Agencies Can’t Agree on Classification of Cryptocurrencies
Classifying cryptocurrencies has been one of the biggest problems the industry has had to deal with. Despite its many regulatory agencies operating on a federal level, the U.S. has had a hard time categorizing digital assets.
The IRS, the nation’s tax collection agency, recognizes cryptocurrencies as property for the purposes of federal taxes. The SEC does not differentiate between crypto and fiat currencies but considers initial coin offerings to be securities.
This discrepancy in the very definition of digital assets has been the root cause of the SEC’s inability to pass any crypto ETFs or introduce any meaningful regulation to the industry. However, as Cheddar pointed out, the SEC does not craft the laws it follows, so the recent initiatives from Congress might push the commission in the right direction. As said by Soto:
“There’ll be a role for the CFTC and FTC to play and we’ll be saving the SEC for true securities, knowing predominantly that these are commodities and currency transactions.”
He explained that the CFTC and the FTC had a “lighter touch” and could easily be tasked with regulating the majority of crypto transactions.
We are yet to see a response from the two agencies, but Soto’s call for more clarification and better classification bring new hope to the troubled industry.
Original article written by Priyeshu Garg at CryptoSlate