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Congressman Reveals New Crypto Bill For SEC & CFTC Joint Regulation

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1 week ago

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Tennessee Congressman John Rose, a member of the Financial Services Committee, is introducing a new crypto bill aimed at reshaping the regulation of digital assets in the United States.

The proposed bill is titled the “Bridging Regulation and Innovation for Digital Global and Electronic Digital Assets Act” or the “BRIDGE Digital Assets Act” bill. It seeks to establish a Joint Advisory Committee on Digital Assets with representatives from both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

Contents of New Crypto Bill

The Joint Advisory Committee will be responsible for offering advice on the rules, regulations, and policies concerning digital assets. According to the bill’s text, its goal is to promote regulatory harmonization between the SEC and CFTC. These two agencies currently oversee different aspects of crypto regulation.

Hence, the proposed committee in the crypto bill will be tasked with finding ways to quantify aspects of digital assets. These include decentralization, functionality, and security. Moreover, Congressman Rose stated that the existing “regulation-by-enforcement” strategy is not working and is instead driving innovation and investment abroad. Moreover, earlier today eToro trading platform settled with the Securities and Exchange Commission to pay $1.5 million which many attribute to stifling innovation.

“The Joint Advisory Committee on Digital Assets will provide a framework for the government and private sector partners to cooperate on a path toward success for the regulatory landscape of digital assets and private sector participants,” said Rose. Furthermore, he emphasized the need for collaboration between the government and private entities for better regulation.

Additionally, the crypto bill mandates that the committee consist of at least 20 members from the private sector. The members will include digital asset issuers, academic researchers, and users of digital assets. These stakeholders would serve as advisors to both the SEC and CFTC on how best crypto regulation would be applied while also encouraging innovation.

Addressing Current Regulatory Gaps

The BRIDGE Digital Assets Act is positioned as a response to growing frustration in the crypto industry over the lack of clarity and consistency in digital asset regulation. The SEC and CFTC have often clashed over jurisdiction, with the former treating certain cryptocurrencies as securities and the CFTC viewing them as commodities.

Thus, the Joint Advisory Committee is intended to bridge this regulatory divide. This will ensure that the agencies are aligned on key policies. In addition, the committee would also explore the potential for blockchain technology and distributed ledger systems to enhance the financial market infrastructure.

It would focus on improving customer protections, increasing transparency, and reducing transaction costs. It will also expand access to financial services through digital assets. The crypto bill requires the SEC and CFTC to jointly adopt a charter for the committee within 90 days of the bill’s enactment.

Members would be appointed within 120 days, and the committee would hold its first meeting within 180 days. Meetings would occur at least twice a year, with additional sessions as needed at the request of either commission.

If the bill is passed, the BRIDGE Digital Assets Act could mark a significant step toward crypto regulation. However, currently, the SEC is facing scrutiny as Chairman Gary Gensler faces illegal hiring allegations. This uncertainty could negatively impact the potential collaboration between the SEC and CFTC.

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Kelvin Munene Murithi

Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.





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Regulation

Texas Court Dismisses Consensys Suit Against SEC on Procedural Basis

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28 mins ago

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September 19, 2024

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The United States District Court for the Northern District of Texas dismissed Consensys Software Inc.‘s case against the Securities and Exchange Commission. This was after a long legal battle to determine the status of Ethereum and other similar software products.

Texas Court Ends Consensys Suit Against SEC

The U.S. District Court in Fort Worth has thrown out the allegations made by Consensys against the Securities and Exchange Commission in a recent legal move. The court, presided over by Judge Reed O’Connor, ruled on procedural grounds. The judge determined the claims concerning Ethereum classification and the regulatory approach to MetaMask were not ripe for judicial review. This decision effectively puts an end to the current litigation initiated by Consensys in April of this year.

The dismissal focused particularly on the lack of final agency action from the SEC, which the court noted was a requisite for a substantial legal challenge. This procedural dismissal indicates that despite the issues raised, the court decided not to proceed with evaluating the merits of the case.

Legal Battle Over Ethereum and MetaMask

Initially, Consensys challenged the SEC’s classification of Ethereum and its derivatives as securities. The complaint highlighted concerns over the SEC’s focus on MetaMask, a software service provided by Consensys that facilitates crypto transactions and staking. 

Despite an earlier notification in June about the SEC dropping its investigation into Ethereum, the broader implications of this regulatory scrutiny remained a contentious issue.

Subsequent to the initial lawsuit, the SEC initiated a separate enforcement action in June, accusing Consensys of operating its MetaMask swaps service without proper registration. 

In addition, according to Judge O’Connor, this case lacked the necessary finality from the Securities and Exchange Commission side to be considered ready for court adjudication.

Reactions and Future Regulatory Steps

The court’s decision to dismiss on procedural grounds does not conclude the legal issues surrounding the regulation of Ethereum and other blockchain technologies. 

More so, Consensys has expressed its intention to continue advocating for blockchain developers and to challenge the SEC’s actions in other jurisdictions, indicating that the struggle over crypto regulation in the U.S. is far from over. The case’s dismissal in Texas does not preclude the blockchain company from pursuing other legal avenues to address their grievances.

In addition, most recently, a US Bankruptcy judge Brendan Shannon approved Terraform Labs plan to liquidate its assets following an ongoing SEC lawsuit.

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Ronny Mugendi

Ronny Mugendi is a seasoned crypto journalist with four years of professional experience, having contributed significantly to various media outlets on cryptocurrency trends and technologies. His work includes notable contributions to Cryptopolitan and Coingape News Media, where he shares his insights on the latest developments in the cryptocurrency market. Outside of his journalism career, Ronny enjoys the thrill of bike riding, exploring new trails and landscapes.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.





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UN Calls for Global AI Governance As Meta & OpenAI Face Challenges

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3 hours ago

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September 19, 2024

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AI News: The United Nations has issued seven recommendations for reducing the risks of artificial intelligence (AI) based on input from a UN advisory body. The final report of the council’s advisory body focuses on the importance of developing a unified approach to the regulation of AI and will be considered at a UN meeting scheduled for later this month.

AI News: UN Calls for Global AI Governance

The council of 39 experts noted that large multinational corporations have been able to dominate the development of AI technologies given the increasing rate of growth, which is a major concern. The panel stressed that there is an ‘unavoidable’ need for the governance of artificial intelligence on a global scale, since the creation and use of artificial intelligence cannot be solely attributed to market mechanisms.

According to the UN report, to counter the lack of information between the AI labs and the rest of the world, it is suggested that a panel should be formed to disseminate accurate and independent information on artificial intelligence.

The recommendations include the creation of a global AI fund to address the capacity and collaboration differences especially in the developing countries that cannot afford to use AI. The report also provides recommendations on how to establish a global artificial intelligencedata framework for the purpose of increasing transparency and accountability, and the establishment of a policy dialogue that would be aimed at addressing all the matters concerning the governance of artificial intelligence.

While the report did not propose a new International organization for the regulation, it pointed out that if risks associated with the new technology were to escalate then there may be the need for a more powerful global body with the mandate to enforce the regulation of the technology. The United Nation’s approach is different from that of some countries, including the United States, which has recently approved of ‘a blueprint for action’ to manage AI in military use – something China has not endorsed.

Calls for Regulatory Harmonization in Europe

Concurrent with the AI news, leaders, including Yann LeCun, Meta’s Chief AI Scientist and many CEOs and academics from Europe, have demanded to know how the regulation will work in Europe. In an open letter, they stated that the EU has the potential to reap the economic benefits of AI if the rules do not hinder the freedom of research and ethical implementation of AI.

Meta’s upcoming multimodal artificial intelligence model, Llama, will not be released in the EU due to regulatory restrictions, which shows the conflict between innovation and regulation.

The open letter argues that excessively stringent rules can hinder the EU’s ability to advance in the field, and calls on the policymakers to implement the measures that will allow for the development of a robust artificial intelligence industry while addressing the risks. The letter emphasizes the need for coherent laws that can foster the advancement of AI while not hindering its growth like the warning on Apple iPhone OS as reported by CoinGape.

OpenAI Restructures Safety Oversight Amid Criticism

In addition, there are concerns about how OpenAI has positioned itself where the principles of safety and regulation of AI are concerned. As a result of the criticism from the US politicians and the former employees, the CEO of the company, Sam Altman, stepped down from the company’s Safety and Security Committee. 

This committee was formed in the first place to monitor the safety of the artificial intelligence technology and has now been reshaped into an independent authority that can hold back on new model releases until safety risks are addressed.

The new oversight group comprises individuals like Nicole Seligman, former US Army General Paul Nakasone, and Quora CEO Adam D’Angelo, whose role is to ensure that the safety measures put in place by OpenAI are in line with the organization’s objectives. This United Nations AI news comes at the heels of allegations of internal strife, with former researchers claiming that OpenAI is more focused on profit-making than actual artificial intelligence governance.

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Kelvin Munene Murithi

Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.





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Regulation

SEC requests for more time to produce documents in Coinbase case

Published

5 hours ago

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September 19, 2024

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The US SEC office Washington DC
  • SEC reportedly seeks an extension to February 2025 for it to provide case documents to Coinbase.
  • Coinbase, Binance and Kraken all facing SEC lawsuits.

The US Securities and Exchange Commission has filed for an extension from the court, asking for more time as it looks to provide documents related to its case against crypto exchange Coinbase. Cointelegraph reported this on Sept. 19

SEC asks for extension

Court documents filed on Sept. 18 reveal that the SEC wants the court to extend the timeline for them to furnish Coinbase with key material by four months.

The regulator filed its request at the US District Court for the Southern District of New York, and if granted, will see it have until February 2025 for the deadline to share over 133,000 documents.

SEC’s court filing comes a month to the end of the initial timeline on Oct. 18, which is when the securities watchdog was to hand over documents as part of the case’s discovery proceedings phase. According to the regulator, an extension will allow it to produce the necessary documents.

SEC has sued several crypto companies

These latest developments in the SEC vs. Coinbase lawsuit adds to several others in recent months and weeks. It includes court filings and verdicts in the regulator’s cases against crypto exchanges Binance and Kraken, which are the other major industry players in a legal battle with the SEC.

Both the courts and US lawmakers have taken issue with the SEC’s use of the term “digital asset securities’. This is part of the main allegations against crypto exchanges, with the regulator alleging securities laws violations by these firms.

In 2020, the agency sued Ripple Labs over the XRP cryptocurrency – a case that dragged for three years before a notable ruling in July 2023 declared XRP not a security. The regulator also reached a $4 billion settlement with Terraform Labs.

A judge denied Kraken’s motion to dismiss the SEC’s lawsuit agaisnt the exchange in August this year.

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