Consumer advocates have described the bill and its designation of the CFTC as the primary regulator of digital assets and trading platforms as too industry-friendly. The bill would define bitcoin and ether, the two largest cryptocurrencies, as digital commodities. The Securities and Exchange Commission will retain jurisdiction over digital assets that are considered securities.
[Related: As FTX burned, lawmakers said to be dithering over regulator]
“The DCCPA [Stabenow-Boozman bill] and other similar bills are not a power grab. It fills a gap in the commodity cash market,” Behnam said. “If we don’t fill the gap, there will be fraud and there will be customer losses in the future. I am confident that the CFTC and the SEC, I commit to you, that we will work together. We will find a way forward to have a reasonable, productive and efficient way to figure out what is a security token and what is a commodity token, and who should regulate. “
Sen. Richard J. Durbin, D-Ill., said he was concerned that political spending by the cryptocurrency industry would undermine the CFTC’s efforts if it were named the primary regulator, given its reliance on annual appropriations. The SEC, by contrast, is funded by fees charged to the entities it oversees, although its funding level is still determined by Congress through the appropriations process.
“The cryptocurrency people are politically active and they’re trying to achieve a political end here,” Durbin said. Former FTX CEO Sam Bankman-Fried gave $2,900 to Durbin’s campaign and $5,000 to his leadership PAC in March, a fact Durbin said he was unaware of until a reporter outside the hearing room asked about it.