CFTC looks to obtain authority to regulate crypto markets with new proposed senate bill

There are dangers and risks for crypto currencies for consumers. Although digital assets were intended to increase the accessibility of our financial system, their prices have been unstable and billions of dollars have been lost as a result of hacks and other abuses on trading platforms. The most popular digital commodities, including Bitcoin and Ether, are exchanged on exchanges that are unregulated by the government and are regarded as commodities.

Because of this, these markets may not always exhibit the openness and fairness that Americans want from our monetary system. Customers will continue to be susceptible to fraud and manipulation in the absence of adequate regulation, and market players won’t have the regulatory confidence they need to innovate and expand.

The Digital Commodities Consumer Protection Act of 2022, which will give the Commodity Futures Trading Commission new tools and authority to regulate digital commodities, was introduced today by U.S. Senators Cory Booker (D-NJ), John Thune (R-SD), Debbie Stabenow (D-MI), Ranking Member of the Senate Committee on Agriculture, Nutrition, and Forestry, and John Boozman (R-AR). Customers and our markets will be protected by this obligatory framework.

“One in five Americans have used or traded digital assets—but these markets lack the transparency and accountability that they expect from our financial system. Too often, this puts Americans’ hard-earned money at risk,” said Senator Stabenow. “That’s why we are closing regulatory gaps and requiring that these markets operate under straightforward rules that protect customers and keep our financial system safe.”

“Digital assets and blockchain technology have already, and will continue, to change the way global markets function. Yet, this fast-growing industry is currently governed largely by a patchwork of regulations at the state level. That simply is not an effective way to protect consumers from fraud. Furthermore, relying solely on state regulation does not ensure that rules and regulations work for all stakeholders. Our bill will empower the CFTC with exclusive jurisdiction over the digital commodities spot market, which will lead to more safeguards for consumers, market integrity and innovation in the digital commodities space,” Senator Boozman said.

Here is what the bill would do-

The proposed legislation grants the Commodity Futures Trading Commission (CFTC) the power to oversee the trading of digital commodities, imposing uniform, stringent regulations for all market participants. These regulations hold online marketplaces for digital commodities to the same standards as conventional financial institutions. They are made to safeguard customers and provide them the power to decide on purchases with greater knowledge.

This measure establishes a uniform national standard and improves collaboration with international authorities by mandating that all digital commodity platforms register with the CFTC. Additionally, it gives the CFTC the necessary market insight so that it can respond to new dangers and defend consumers.

Information from this article came from https://www.agriculture.senate.gov/imo/media/doc/crypto_one-pager1.pdf



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