SNEAK PEEK

• Senators Lummis and Gillibrand proposed a new crypto regulatory bill.
• Ripple’s Huber criticizes the bill, igniting further debate.
• The bill aims to clarify the line between securities and commodities.

The world of cryptocurrency is once again abuzz with discussion, thanks to U.S. Senators Cynthia Lummis and Kirsten Gillibrand, who have pushed forward a new legislative action concerning regulating digital currencies in the United States. Interestingly, this development has been criticized by Mr. Huber, an influential member of the Ripple (XRP) community, who has taken issue with Senator Lummis. He has publicly accused her of distorting the public’s understanding of the issue, sparking further debate about how cryptocurrencies should be regulated in the future.

You are trying lying. You are trying to deceive the public. pic.twitter.com/DxuZZtjxdV

— Mr. Huber🔥🦅🔥 (@Leerzeit) July 26, 2023

In a public interview, Senator Lummis had previously proposed that existing structures categorize most digital currencies as commodities. This classification, she argued, would allow these digital assets to fall under the purview of the Commodity Futures Trading Commission (CFTC) for both spot and futures markets. She further stressed that the controversial Ripple verdict emphasized Congress’s need to enact a clear regulatory framework for crypto assets.

The Lummis-Gillibrand bill, initially introduced in June last year, is a comprehensive bipartisan proposal aiming to protect consumers while still encouraging industry innovation. The bill came into the limelight amidst a period of industry turmoil that saw the collapse of the TerraUSD stablecoin and later the implosion of trading platform giant FTX.

Senator Gillibrand, the Democratic representative from New York, clarified that the bill does not dispute the potential for most cryptocurrencies to be seen as securities, as posited by Chairman Gensler. Instead, the legislation seeks to provide an updated regulatory framework to differentiate between securities and commodities in the vast cryptocurrency landscape.

Gillibrand mentioned the established ‘Howey Test’ as an effective measure for differentiating securities. In the new legislation, the Howey Test has been modernized to suit better the unique conditions presented by digital assets.