As US regulators work to legislate the crypto industry, two US representatives want to task the Commodity Futures Trading Commission with recommending new practices to Congress.
In a December 6 press release, it was announced that two House members introduced two bipartisan bills proposing to create a national regulatory framework for the cryptocurrency industry. Submitted by Florida Democrat Darren Soto and North Carolina Republican Ted Budd, the bills will assign virtual currency research and analysis to the Commodity Futures Trading Commission (CFTC) and other financial regulators, including the Securities and Exchange Commission (SEC).
The first bill, the Virtual Currency Consumer Protection Act of 2018, directs the CFTC to research and analyze crypto price manipulations. The CFTC would then make recommendations to Congress for any regulatory changes needed to improve the CFTC’s monitoring and enforcement activities pertaining to prevention of price manipulation. In their statement, Soto and Budd based this bill’s proposal on the concerns raised in the New York Attorney General’s recent report, which highlighted the inability of exchanges to protect investors from abusive practices such as trading bots or wild price swings.
The second bill, the US Virtual Currency Market and Regulatory Competitiveness Act of 2018, asks the CFTC to carry out worldwide comparisons of crypto regulations to examine “alternatives for current burdensome regulations that may inhibit innovation.” Based on the gathered information, the CFTC or other regulators would make recommendations to Congress for any regulatory changes to “promote competitiveness … [and] encourage the growth of adoption of virtual currencies in segments of the commodity market.”
The federal government has been playing catch-up on regulating ICOs and crypto securities options, relying largely on CFTC and SEC decisions in the absence of legislation. In their statement, the representatives noted:
“Virtual currencies and the underlying blockchain technology has a profound potential to be a driver of economic growth. That’s why we must ensure that the United States is at the forefront of protecting consumers and the financial well-being of virtual currency investors, while also promoting an environment of innovation to maximize the potential of these technological advances.”
The introduction of the bills follows this month’s G20 summit, where an agreed-upon issue was the establishment of international crypto regulations, and an October roundtable of crypto industry leaders, who asked Congress to seriously consider crypto regulation for the sake of protecting American leadership in the industry.