A proposed crypto bill would hand oversight role to CFTC

A draft of a major crypto bill from Sens. Cynthia Lummis and Kirsten Gillibrand seeks to add more clarity to crypto regulation, and appears to propose a far bigger role for the Commodity Futures Trading Commission.

A draft of the widely anticipated bipartisan bill, reported by the Block, a crypto news site, would give the CFTC a wide remit over digital assets. It reads in part: "Except as otherwise provided by this section, the Commission shall have exclusive jurisdiction over any agreement, contract, or transaction involving a contract of sale of a digital asset that is offered, solicited, traded, executed, or otherwise dealt in interstate commerce, including market activities relating to ancillary assets."

The CFTC already oversees crypto derivatives, and the agency has pushed for more resources to regulate digital assets in recent budget requests.

The draft language also defines crypto entities such as “digital asset,” “distributed ledger technology,” “smart contract,” “payment stablecoin” and “virtual currency."

Providing a more regulatory definition of crypto, the proposal also defines "ancillary assets" as "an intangible asset that is offered, sold, or otherwise provided to a person in connection with the purchase and sale of a security through an arrangement or scheme that constitutes an investment contract, as that term is used in section 2(a)(1) of the Securities Act of 1933."

The draft bill, expected to be formally introduced in the coming weeks, also details areas of responsibility for crypto that would fall under other agencies such as the Securities and Exchange Commission.

The language assigning primary responsibility to the CFTC matches other reports about the forthcoming bill, expected to be called the Responsible Financial Innovation Act.

Lummis, a senator from Wyoming, has been outspoken on crypto. She and Gillibrand recently appeared on stage together at the D.C. Blockchain Summit to discuss the planned legislation, where Gillibrand said she expected a Senate vote on the bill "next year at the latest."

While the crypto industry has been lobbying for a variety of approaches to regulating digital assets, giving more responsibility to the CFTC and minimizing the SEC's role is a common theme in many proposals.