Bitcoin, ethereum and cryptocurrency prices are struggling as fresh stablecoin fears swirl and an economic slowdown drags on stock markets.
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The bitcoin price has dipped back under the closely-watched $30,000 per bitcoin level (even as bulls continue to make huge price predictions) while the ethereum price has dropped under $2,000 per ether. The growing threat of a regulatory crackdown has hung over crypto markets since the collapse of two major cryptocurrencies earlier this month.
Now, the crypto market is braced for details of a long-awaited crypto bill put together by a bipartisan group of U.S. senators and led by the bitcoin-supporting senator Cynthia Lummis (R-WY).
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The crypto market is awaiting details of a hotly-anticipated crypto bill, expected to arrive amid a … [+]
“We’ve designed [the crypto bill] so it works within the customary framework for managing and regulating traditional assets,” Lummis told Axios earlier this month, adding during a speech at the American Enterprise Institute think tank last week that the bill’s details could become public as soon as this week and the formal bill introduced in Congress in June.
“We’re going to put it out in draft form for discussion purposes and you can spend 30 days to help us get this bill in as good of a form we possibly can before actually filing it,” Lummis said.
The bill is expected to define whether different cryptocurrencies are either securities or commodities and which agency will have oversight of them—either the Securities and Exchange Commission (SEC) or the Commodity Future Trading Commission (CFTC).
Other provisions will cover consumer protection and taxation, however, rules for blockchain-based non-fungible tokens (NFTs), which have become wildly popular over the last year after being embraced by the worlds of art, entertainment and sport, are not expected to be included.
In her speech last week, Lummis suggested the bill would put stablecoins, such as tether and the collapsed algorithmic stablecoin terraUSD (UST), in the securities category.
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The bitcoin price has fallen sharply over the last week, dragging down ethereum and other … [+]
“So, for example, bitcoin’s a commodity,” Lummis told Axios. “So it would fall under the CFTC for purposes of trading and the spot market and the futures market. And then when [a cryptocurrency] fits in the Howey Test [which uses four criteria to decide what qualifies as an investment contract] that makes it a security, it would fall under the SEC.”
Last week, SEC chair Gary Gensler, who has previously pushed lawmakers for increased oversight of the fast-growing crypto market, signaled he agreed with Lummis, saying bitcoin “maybe” is “a commodity token.”
Gensler told the House Appropriations Committee that the SEC has “jurisdiction over probably a vast number” of cryptocurrencies but not bitcoin, saying bitcoin would go “over there” to the CFTC.
“I think a lot of these tokens will fail,” Gensler said following the committee hearing, it was reported by the Wall Street Journal. “I fear that in crypto…there’s going to be a lot of people hurt, and that will undermine some of the confidence in markets and trust in markets.”