Crypto Bills Secure Landmark Victory in US Congress: Law Decoded Achieves First Major Success

The United States made notable progress in establishing regulatory clarity for the cryptocurrency industry last week. The House Financial Services Committee (FSC) approved the Financial Innovation and Technology for the 21st Century Act with a 35–15 vote. The bill’s primary objective is to define rules for crypto firms on when they should register either with the Commodity Futures Trading Commission (CFTC) or the Securities and Exchange Commission (SEC).

Additionally, the bipartisan Blockchain Regulatory Certainty Act, sponsored by Representatives Tom Emmer and Darren Soto from both sides of the aisle, also secured approval from the FSC. This bill aims to streamline the processes for “blockchain developers and service providers,” such as miners, multisignature service providers, and decentralized finance platforms, by removing existing obstacles and requirements.

While these bills advanced, some lawmakers opposed another proposed piece of legislation called The Digital Assets Market Structure Bill. Representative Maxine Waters criticized the bill for being too accommodating to the crypto industry and disregarding regulatory guidance from the SEC.

In the U.S. Senate, a crypto-related amendment was included in the $886 billion 2024 National Defense Authorization Act. Sponsored by senators Cynthia Lummis, Elizabeth Warren, Kirsten Gillibrand, and Roger Marshall, the amendment mandates the establishment of examination standards for cryptocurrencies and directs the U.S. Treasury Department to conduct a study aimed at curbing anonymous crypto transactions, which includes scrutinizing the use of crypto mixers like Tornado Cash that provide privacy to users.

Moving to Canada, the Office of the Superintendent of Financial Institutions (OSFI) is proposing changes to its capital and liquidity approach to crypto assets. The proposed rules will categorize crypto assets into four classes, simplifying institutions’ handling of perceived crypto risks. The OSFI has opened public consultations on two draft guidelines, one affecting federally regulated deposit-taking institutions and another addressing the regulatory capital treatment of crypto-asset exposure for insurers. The consultations will run until September 20.

In Russia, President Vladimir Putin officially signed the digital ruble bill into law, giving a green light to the country’s central bank digital currency (CBDC) project. The digital ruble law will take effect from August 1, 2023, with one provision set to be enforced in August 2024. The legislation empowers the Russian central bank to conduct a pilot program with real consumers, initially planned in collaboration with 13 local banks.

In a legal dispute, Binance and its CEO, Changpeng “CZ” Zhao, have requested the dismissal of a lawsuit filed by the CFTC. The attorneys for Binance and CZ argue that the CFTC has overstepped its regulatory authority and engaged in regulatory overreach. The CFTC’s lawsuit alleges that Binance offered unregistered derivatives products in the U.S. and failed to comply with various regulatory requirements. The legal battle raises questions about the CFTC’s jurisdiction and its attempt to regulate foreign entities operating outside the United States.

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