A bipartisan pair of US senators moves ahead with a proposal that might allow the primary oversight of the crypto market to the Commodity Futures Trading Commission (CFTC). However, this move is seen as a shift pushed by the industry and quietly backed by the Trump administration.
The discussion draft is pitched by Sen. John Boozman (R-Ark.) and Sen. Cory Booker (D-N.J. This comes in when the digital assets market is already dealing with huge turbulence. The cumulative crypto market cap has dropped from the $4 trillion mark to hover around $3.5 trillion over the past 30 days. Bitcoin price dropped by almost 6% in the same period.
Senators push to curb the SEC’s power
According to reports, the draft would classify most cryptos as digital commodities rather than securities. It suggests that exchanges and trading platforms will be answerable to the CFTC instead of the Securities and Exchange Commission (SEC). This will open up a new regime of registration requirements, disclosure rules, and fee structures for firms operating in the space.
Sen Booker sees this as a first step, as the legislation is far from settled. Meanwhile, the real challenge could be the CFTC’s capacity to deal with new cases. As of now, the agency is severely understaffed, with only one active commissioner. Caroline Pham is the only one left on its five-member panel following a string of resignations. Trump’s nominee to run the agency, former CFTC lawyer Mike Selig, is still awaiting Senate confirmation.
The staffing issue stands as the crux of the political fight. Democrats are worried that shifting the role to the CFTC without expanding the agency’s resources would leave crypto lightly supervised. The crypto market is in the expanding phase right now.
On the other side, Republicans see the CFTC as a more predictable and less punitive regulator than the SEC.
The report highlighted that the bill is sidestepping two of the most contentious issues in crypto policy. This includes DeFi and anti-money-laundering enforcement. Democrats are looking for an explicit regulatory authority over decentralized protocols. Meanwhile, Republicans want to leave them largely untouched.
Crypto industry lobbying intensifies
Lobbying has already intensified since the new administration took over the White House. October saw executives from Coinbase, Circle, and other large firms making the rounds in Senate offices. This hints that the market structure legislation is effectively stalled unless Democrats commit votes. Even if every Republican chooses to support the bill, still at least seven Democratic votes would be required to break a filibuster. This remains uncertain.
Looking at the draft, the crucial point which highlighted is not just who regulates crypto, but how. The bill reportedly aims to protect the right to self-custody digital assets. This will allow individuals to hold and transact directly. However, they have to prove that they are not violating sanctions or criminal law.
As of now, the Senate Agriculture Committee has not scheduled a hearing, but the outlines are now on paper. The crypto market didn’t react much to the draft as the cumulative cap dipped by around 1.5% in the last 24 hours. Bitcoin price hovers below the $105K mark, yet it remains up by almost 12% on a year-to-date (YTD) basis.
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