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.
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.
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.
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.
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.