It was first reported before Christmas that Wyoming Senator Cynthia Lummis planned to introduce a comprehensive crypto regulation bill. The Republican Lummis was already known for her pro-crypto stance and announced right away that she was looking for a Democratic co-sponsor. New York Senator Kirsten Gillibrand, who had not previously been known to have a strong position on cryptocurrency, was named as the co-sponsor in March. The highly awaited Responsible Financial Innovation Act (RFIA) was introduced in the United States Senate on June 7.
The RFIA is 69 pages of text thick with legal and crypto jargon. There is an element of drama lurking behind the bill’s dry language, however, as it sets out what needs to be done and who should do it in the face of the inaction, confusion and interagency competition that characterize digital asset regulation in the United States today.
Lummis and Gillibrand are well suited for the task. Lummis is a member of the Senate Banking Committee, which oversees the Securities and Exchange Commission (SEC), a main player in the drama. Gillibrand is a member of the Senate Agriculture Committee, which oversees the Commodity Futures Trading Commission (CFTC) — another cast member.
“I don’t think CFTC is the primary regulator” of the digital asset market, Gillibrand said on a Washington Post livestream on June 8. “They just have the obligation to regulate Bitcoin and Ether, the majority of cryptocurrencies today. But the SEC has an enormous responsibility. […] And so we aren’t minimizing the role of the SEC, but we are empowering both regulatory agencies to begin to take this market and give it safety and soundness.”
Division of labor
The two senators have said repeatedly that most altcoins are securities, as SEC Chair Gary Gensler has long held, and the RFIA continues to depend on the Howey Test to define securities. That test was introduced in a Supreme Court decision in 1946 on sales of Florida orange groves.
Under the…
