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Seeking Alpha 2022-08-06 15:29:00

Senate bill seeking CFTC oversight over bitcoin, ether could ‘free up billions’ of dollars

A bill introduced by a handful of U.S. senators looking to empower the Commodity Futures Trading Commission to regulate bitcoin (BTC-USD) and ethereum (ETH-USD) would deem the two largest cryptocurrencies by market cap as so-called digital commodities in a move that could “potentially free up billions of capital” into them, said Marcus Sotiriou, an analyst at digital asset broker GlobalBlock.If the proposed bipartisan legislation, aka the Digital Commodities Consumer Protection Act, were to take effect, “it would mean that these [BTC and ETH] are the only cryptos that are not able to be classified as securities, which would remove a significant concern for side-lined institutions,” Sotiriou wrote in a note on August 4. The key part of this bill is that bitcoin (BTC-USD) and ether (ETH-USD) would not be classified as securities. Generally, if a digital token were categorized as a security, crypto exchanges such as Coinbase Global (COIN), for example, would likely find themselves burdened since they would have to then register with the Securities and Exchange Commission for listing securities, and would have to pay fines if they didn’t, Sotiriou explained to Seeking Alpha via email. “Therefore, the Ethereum (ETH-USD) token’s price would likely fall due to exchanges delisting it, to avoid facing fines for breaking securities laws,” he added.Meanwhile, Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI) and Sen. John Bo...

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