U.S. Senator Kirsten Gillibrand said, “Most cryptocurrencies go to the SEC […] Bitcoin and Ether would certainly be commodities, and that’s agreed upon.”
U.S. Senators Carsten Gillibrand and Cynthia Lumis believe most altcoins will probably be considered securities under their proposed new law, but they have confirmed that bitcoin (BTC) and ether (ETH) will be classified as products.
Both Lumis and Gillibrand agree with Gary Gensler, chairman of the U.S. Securities and Exchange Commission, on his calculation that most cryptocurrencies are subject to the Howie test.
“Most cryptocurrencies go to the SEC […] Bitcoin and Ether would certainly be commodities, and that’s agreed upon. That’s agreed with Chairman Gensler as well as the chairman of the CFTC.”
The Gillibrand Commodity Futures Trading Commission identified the law as the primary regulator and backtracked on the report. “I don’t think CFTC is the primary regulator,” he said “They just have the obligation to regulate Bitcoin and Ether, the majority of cryptocurrencies today.”
The duo made the remarks during an event in the Washington Post on Wednesday, a day after the release of details of the responsible financial innovation law.
CTFC Chair Rostin Behnam was also present at the event and took a slightly different view of the ratio of securities to altcoins. He said that although there are “probably hundreds” of coins that mimic security currencies, there are also many commodity coins, such as BTC and ETH, which should be regulated by the CFTC.
“It’s pretty clear that many of the digital assets themselves replicate or look like commodities. They’re more like stores of value than they are securities.”
Tony Tuths, head of KPMG US’s digital resources team, told Cointelegraph that the law, under its current form, was unlikely to “move forward” shortly, adding that it was unclear which coins would eventually fall within the purview of the SEC vs. the CTFC.
“On the regulatory side, the legislation calls for the CFTC to be the primary regulator but then carves out a wide swath of tokens that have attributes similar to securities for regulation by the SEC. It will be difficult to decipher what exactly is in the SEC bucket, but it could be the exception that swallows the rule.“
The new bipartisan bill is anticipated to evaluate heavily on the Howie test to determine whether a specific currency is classified as a security or a commodity.
Senator Lummis said, “We’re trying to just fit the digital asset world into our current regulatory framework. […] We spent a lot of time on the definition of the modern Howey Test,” during a CNBC interview on June Tuesday.
Howey Test has become a crucial point of the SEC’s lawsuit against Ripple, which began in December 2020, claiming that the company used its digital token XRP to raise funds in 2013 and had an unregistered security token at the time.
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