Capital markets Legal and IP News

Senator Toomey seeks input on cryptocurrency, blockchain legislation

us legislation capitol hill

Pat Toomey, the most senior Republican on the U.S. Senate Banking Committee, has requested legislative proposals to support cryptocurrency innovation, blockchain and protect crypto investors. At the same time, Democrat Congressman Darren Soto has introduced two bipartisan bills on similar topics.

“Rather than trying to ignore or suppress cryptocurrency and related technologies, regulators and legislators alike need to recognize that open, public networks are here to stay. Our laws and regulations must adapt to these developments,” said Senator Toomey. 

“Not only might cryptocurrency and blockchain technologies be as revolutionary as the internet, they also have the potential to build wealth and financial independence for individuals who are empowered to engage in financial transactions directly with each other, free from oft-costly middlemen.”

Proposals are requested by September 27.

CFTC’s role in regulating virtual currency

Meanwhile, Congressman Darren Soto published two bipartisan bills. One asks the Commodity Futures Trading Commission (CFTC) to explore how price manipulation happens in cryptocurrency markets. It also asks the CFTC to clarify the extent to which it has regulatory authority over market surveillance and enforcement.

Last week, CFTC Commissioner Dawn Stump clarified that the CFTC only has regulatory authority over derivatives markets. Hence, for digital assets that are considered commodities – such as Bitcoin and possibly Ethereum – the CFTC lacks regulatory authority, including oversight. However, it does have enforcement authority for the underlying cash markets where there’s price manipulation or fraud because that impacts derivatives.

The second Soto bill, the “U.S. Virtual Currency 5 Market and Regulatory Competitiveness Act of 2021”, asks for the CFTC in conjunction with the SEC and other agencies to explore how U.S. legislation can provide clarity and encourage innovation in the emerging cryptocurrency sector.

At the end of last month, Congressman Beyer introduced one of the most comprehensive bills to date, a 58-page “Digital Asset Market Structure and Investor Protection Act”.