U.S. Senate New Crypto Market Structure Bill Puts CFTC in Lead

CFTC vs SEC Clash Heats Up Over Senate Crypto Market Structure Bill

A major milestone has arrived for the U.S. typo industry. The Senate Agriculture Committee has released its long-awaited Crypto Market Structure bill, a bipartisan proposal aimed at finally defining who regulates cryptocurrencies in the U.S. – the CFTC or the SEC.

The draft, released by Senator John Boozman and Senator Cory Booker, grants the Community Future Trading Commission (CFTC) expanded authority to oversee digital commodity spot markets, bringing long-overdue clarity to how cryptocurrencies like Bitcoin and Ethereum are regulated.

Source: Press Release

This legislation builds on the CLARITY Act – passed in May by the House, signaling growing momentum in Washington for comprehensive crypto-regulation.

What the Senate New Crypto Bill Proposes ?

The Agriculture Committee’s crypto bill aims to establish a transparent and fair structure for the U.S. digital asset market.

Key highlights include:

• A clear definition of digital commodities and a CFTC-led regulatory regime for spot markets.

• Consumer protections, including fund segregation, conflict of interest safeguards, and disclosure standards.

• Registration requirements for digital trading platforms to ensure liquidity and protection retail investors.

• Collaboration between the CFTC and SEC to coordinate on overlapping areas. Protection for self-custody and innovation blockchain technologies.

• A new funding mechanism for the CFTC-agency to manage its expanded authority.

CFTC vs SEC: Defining Crypto’s Regulatory Home

For years, the biggest question in U.S. crypto policy has been: Who is in charge, the CFTC or the SEC?

The CFTC oversees commodities such as gold and oil, while the SEC regulates securities, which also includes the rule for digital asset exchanges and approval of the ETF related to cryptocurrencies in its area – showing more control of SEC. 

However, the Senate’s new crypto market structure bill clearly leans towards placing Bitcoin, Ethereum, and other decentralized assets under the CFTC’s jurisdiction, recognizing them as digital commodities. 

This could reduce the regulatory overreach many crypto-firms have faced from the SEC, whose enforcement actions, like the Ripple, BlockFi, and Telegram cases, have shaped but also clouded the industry’s path forward. 

CFTC-Led Regulation: A Bullish Signal for the Market and Community

Senator Boozman emphasized that CFTC's the right agency for regulation of what building a long-term framework. Senator Booker also cited it as a consumer protection, market manipulation preventer and a financial innovation. 

Coincidentally, the crypto-community and analysts are calling this the most bullish U.S. crypto policy move yet. They are content with CFTC's at the helm, hoping for regulatory certainty that many investors and institutions have been waiting for. The broader crypto-market has shown a market capitalization rise of 2.52% to $297.8 trillion in weekly data – Coinbase.

However, the final version of the bill could take months, as lawmakers refine the text and seek broader bipartisan support. The bill will need 60 votes in the Senate to pass – a challenge given ongoing debates among Democrats over the scope of CFTC-authority. 

But, if passed, it could mark a historic turning point – the start of a truly regulated and globally competitive U.S. cryptocurrency market.