January 29, 2023

US Congress will review the “Cryptocurrency Law 2020”

US Congress will review the “Cryptocurrency Law 2020”

US Congressman Paul Ghosar introduced a bill aimed at clarifying cryptocurrency regulation. The bill, dubbed the Cryptocurrency Act 2020, defines which US financial regulators should regulate the cryptocurrency industry.

The bill divides crypto assets into three types:

  • "Crypto - exchange commodity (commodity)",
  • “Crypto is a security”,
  • "Crypto is the currency."

The bill proposes a "federal regulator"for each category: the Commodity Futures Trading Commission (CTFC) will regulate the first, the Securities and Exchange Commission (SEC) the second, and the Financial Crime Prevention Network (FinCEN) last.

The bill also contains definitions for three types of crypto assets:

  • “Cryptocommodity” means “economic goods or services”;
  • Cryptocurrency is defined as the representation of the US dollar (stablecoin) or “synthetic derivative on the blockchain”;
  • “Crypto-security” is “all debt, equity and derivative instruments on the blockchain”.

"Secretary of the Treasury, acting through FinCEN,must issue rules requiring that each cryptocurrency (including stablecoins) allows you to track transactions and persons involved in such transactions in the same way as the requirements of financial institutions regarding foreign exchange transactions ”, - the bill says.

Earlier this year Congressman Warren Davidsonintroduced his bill to determine the legal status of cryptocurrencies in the United States. More recently, CFTC, FinCEN and SEC issued a joint statement stating that cryptocurrencies should work similar to banking operations and comply with US financial services laws.