Rep. Soto, Emmer Reintroduce Bills Seeking CFTC Crypto Action
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Rep. Soto, Emmer Reintroduce Bills Seeking CFTC Crypto Action

1yr ago

The bipartisan bills focused on fighting price manipulation and improving regulatory clarity come on the heels of failed efforts to fix crypto tax-reporting rules in the $1 trillion infrastructure bill.

Rep. Soto, Emmer Reintroduce Bills Seeking CFTC Crypto Action

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A pair of congressmen have reintroduced legislation that calls on regulators to recommend ways to fight price manipulations and promote U.S. competitiveness in the cryptocurrency industry.

Rep. Daren Soto (D-Fla.) announced on Aug. 25 that he and Rep. Tom Emmer (R-Minn.) have co-sponsored the Virtual Currency Consumer Protection Act of 2021 and the U.S. Virtual Currency Market and Regulatory Competitiveness Act of 2021.

The bills, which were first introduced in 2018, call on the Commodity Futures Trading Commission to recommend regulatory changes to improve consumer protections while also providing regulatory clarity the cryptocurrency industry needs to remain competitive. 

“Virtual currencies and the underlying blockchain technology have a profound potential to be a driver of economic growth,” Rep. Soto said. “That’s why we must ensure that the United States is at the forefront of protecting consumers and the financial well-being of virtual currency investors, while also promoting an environment of innovation to maximize the potential of these technological advances.”

The Consumer Protection Act instructs the CFTC to “describe how price manipulation could happen in virtual markets and make recommendations for regulatory changes to improve the CFTC’s price manipulation prevention procedures,” Soto’s release said.

The Competition bill orders a CFTC study comparing U.S. crypto regulation with the rules in other countries and recommending changes to promote competitiveness through regulatory clarity changes to existing rules. 

The proposed legislation comes a week after the pair introduced another cryptocurrency bill, the Blockchain Regulatory Certainty Act. It focuses on the impact of rules announced by the multinational Financial Action Task Force, or FATF, that would force blockchain developers, miners, and other service providers to register as money transmitters.

Tax Fight Failure

The legislation comes shortly after the cryptocurrency industry failed — just barely and at the last moment — to amend provisions in the Senate’s $1 trillion infrastructure legislation that would raise $28 billion through tax changes. Most notably, this included amending the rules to force “non-custodial” brokers to collect tax information on clients — even crypto validators and  developers. This would also drag in permissionless DeFi-based decentralized exchanges (DEX) and peer-to-peer lending markets that cannot do it.

Despite unanimous support for the infrastructure bill changes, the Senate failed to add those changes because of the rush to support the much larger legislative agenda, and a procedural loophole in how amendments are added to legislation. 

That allowed a single senator to prevent the changes by objecting to an amendment that required 100% support. Sen Richard Shelby (R-Ala.) objected to the changes after the senate rejected an unrelated amendment he tried to add to the bill. 

Shelby later said he supported the crypto-target changes from a legislative perspective. 

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