Senators Boozman and Booker are fighting to wrestle crypto oversight from the SEC and hand it to the CFTC. Their bipartisan bill mirrors the House-passed CLARITY Act, creating a three-category system for digital assets. The move follows years of regulatory confusion between agencies. Consumer protections like self-custody rights and fund segregation are key features. Recent developments between SEC and CFTC hint at cooperation, but industry players aren’t buying temporary fixes. The full story reveals why this matters.
While lawmakers debated and agencies squabbled, the cryptocurrency industry has been caught in regulatory crossfire for years. SEC Chair Gary Gensler has been on a mission, labeling most digital assets as securities under the 1946 Howey test. No new rules, just enforcement actions. Lots of them.
Meanwhile, the CFTC took a different view. Some crypto assets? Just commodities, especially those decentralized ones that don’t generate profit. Problem is, their authority over spot markets is limited to stopping fraud and manipulation. Nothing more. The result? A regulatory mess that has crypto companies playing a high-stakes guessing game.
Crypto companies stuck in regulatory no man’s land, forced to read bureaucratic tea leaves before every business decision.
Enter Senators Boozman and Booker with their bipartisan bill. Their plan? Strip power from the SEC and hand the crypto keys to the CFTC. Pretty similar to what the House already passed with the CLARITY Act back in July. The bill creates clear definitions for “digital commodities” and establishes actual rules for spot markets. Imagine that – clarity!
Consumer protections are built in too. Segregated customer funds, conflict of interest safeguards, and rules to stop sketchy trading practices. The bill would create a three-category system for digital assets: digital commodities, investment contract assets, and permitted payment stablecoins. The bill even forces the agencies to work together. What a concept.
The legislation includes significant provisions that support self-custody of assets, a feature widely praised by cryptocurrency advocates focused on financial sovereignty. The growing demand for regulatory clarity follows Ripple’s landmark legal victory against the SEC, which established that secondary market XRP sales aren’t securities. But wait – plot twist! On September 2, the SEC and CFTC surprised everyone with a joint statement. Suddenly, registered exchanges can list certain spot crypto products, even with leverage and margin. No new laws required. After years of fighting, they decided to play nice.
The agencies doubled down on their newfound friendship with a September roundtable. Acting CFTC Chair Pham talked about “regulatory harmonization” – bureaucrat-speak for “we’ll stay in our lanes but coordinate better.”
Too little, too late? Maybe. The Senate bill is still moving forward, suggesting Congress doesn’t trust this regulatory kumbaya moment to last. After years of confusion, the industry just wants someone – anyone – to provide clear rules. Is that really too much to ask?
