The US Senate is marching to develop rules and regulations for the majority of crypto markets, and has published a draft discussion of the Market Structure Bill that will more clearly define some of the frameworks lawmakers are thinking of.
The 35-page draft released Tuesday will develop a new definition of non-security digital assets and direct the Securities and Exchange Commission to engage in creating rules regarding these assets that exempt them and their issuers from existing regulations. The bill would later direct the SEC and Commodity Futures Trading Commission to engage in co-rule development on certain aspects of crypto market activity, such as portfolio margins.
The draft follows the introduction of principles from the Senate Banking Committee last month, with Chairman Tim Scott saying it will “serve as an important baseline” for the bill. It focuses primarily on the SEC rather than the CFTC, and directs them to engage in rules development on subsidized assets and disclosure requirements.
As presented, this subsidized asset itself does not grant financial rights to the owner, but defines a “subsidized asset” as a digital asset sold “in connection with the purchase of security through the arrangements that constitute an investment agreement.”
In creating this definition, the bill already differs from the House of Representatives Clarity Act. This was passed in a massive bipartisan vote last week, but it either doesn’t define “additional assets” or relies on that definition in the Senate bill’s way.
The bill also allows issuers to self-certify that their subsidized assets do not provide the rights that normal security could potentially. Additionally, if SEC 60 Day reviews an asset and determines it is similar to security, you can refuse self-authentication.
“My colleagues in the House and Senate are sharing the same goal: to provide clear rules for the pathway of digital assets that protect investors, to promote innovation and to maintain a static future of digital finance in America,” Scott said in a statement.
“We appreciate the hard work our counterparts in our home to create smart, bipartisan laws and look forward to building on their work in the Senate.
Senator Cynthia Ramis, who heads the Digital Assets Subcommittee, similarly said in a statement:
Lawmakers also published dozens of questions for the public to respond, asking for input on various aspects of the bill, including discussions on the bill’s “subsidized assets” and whether the definition is useful, what information issuers need to disclose, and how intermediaries should be treated.
Lawmakers are looking for responses by August 5th, giving industry participants and others a weight of two weeks.
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