Cryptocurrency Regulation: Congress Committee Advances Proposed Law

A congressional committee has reportedly voted to advance a proposed law that will determine when cryptocurrencies should be treated as securities or commodities.

Cryptocurrency Regulation!

According to Reuters, the House Financial Services Committee approved the proposed law on Wednesday, and the House Agriculture Committee will consider the same bill on Thursday. If the 21st Century Financial Innovation and Technology Act (HR 4763) is enacted, it will clarify the jurisdiction of the Commodity Futures Trading Commission (CFTC) and the U.S. Securities and Exchange Commission (SEC) regarding cryptocurrencies.

The SEC accuses cryptocurrency platforms of selling crypto assets that the regulatory agency considers unregistered securities. However, the recent court ruling in the Ripple Labs case contradicts this claim, as Judge Analisa Torres in San Francisco concluded that the open-market sales of XRP by the payment company did not constitute the sale of securities.

The formatting of the bill indicates that congressional committee members discussed and amended the proposed legislation before presenting it to the House of Representatives for consideration. Representative Patrick McHenry (R-NC), Chairman of the House Financial Services Committee, stated:

While other jurisdictions such as the United Kingdom, European Union, Singapore, and Australia are moving forward with clear regulatory frameworks for digital assets, the U.S. faces the risk of falling behind. We intend to change that today.

Santiment Data!

According to on-chain analytics firm Santiment’s data, the recent price drop does not seem to have triggered a significant market reaction yet. The relevant indicator here is the “exchange supply,” which measures the total amount of Bitcoin stored in wallets on all centralized exchanges.

When the value of this metric increases, it may indicate that investors are currently depositing a significant amount of money into these platforms. Since one of the main reasons holders transfer their cryptocurrencies to exchanges is for selling purposes, such a trend can result in downward price pressure.

On the other hand, a decrease in the value of the indicator may indicate that investors are withdrawing their cryptocurrencies to their own wallets, potentially to hold them for an extended period. Naturally, such accumulation can have a positive impact on the asset’s price in the long term.