U.S Republicans File Legislative Draft To Classify Crypto as Commodities

• It is an effort to standardize the handling of digital assets across government agencies.
• The Securities and Exchange Commission (SEC) might still dispute this assertion.

Senior Republicans in the United States House of Representatives have filed a new legislative draft. It seeks to reclassify digital tokens from securities to commodities. This is a major attempt to solve the regulatory difficulties surrounding digital assets.

The proposal was made by the leaders of the House Financial Services Commission and the House Agriculture Committee. In an effort to standardize the handling of digital assets across government agencies.

SEC Might Dispute

The proposed law’s primary emphasis is on the question of whether or not a digital asset is better categorized as a commodity or a security. However, they will need to explain how they work in depth. And confirm that no one organization owns more than 20% of the assets in order to be considered decentralized.

The Securities and Exchange Commission (SEC) might still dispute this assertion. By investigating further to see whether the asset is subject to its purview. In the United States, crypto projects have been at odds for a long time over whether or not their tokens should be deemed investment contracts. Especially, after the project has reached a certain level of decentralization.

For this reason, the authors of this proposed law have included a concept of “decentralization” to provide crypto initiatives in the nation with more legal clarity. In addition to attempting to reclassify the industry. The proposed legislation would create a new kind of registered firm called a digital commodity exchange, which would be regulated by the CFTC.

These markets would need to take safeguards to avoid market manipulation and adhere to the agency’s baseline protections, such as client asset segregation. In addition, the CFTC would be given the ability to regulate the direct trade of cryptocurrency commodities.