Cryptocurrency needs clarification on “digital commodity” – Sheila Warren

Sheila Warren, executive director of the Crypto Council for Innovation, said the Digital Commodities Consumer Protection Act currently being considered by US lawmakers was an “important step” in achieving regulatory clarity, but recommended changes to determine the role governments will take on digital assets .

In written testimony for a Wednesday hearing on the bill with the Senate Agriculture Committee, Warren said the proposed legislation needed to better define a “digital commodity” and security rather than leaving the issue to regulatory agencies or US courts. According to the executive director of the Crypto Council, the Digital Commodities Consumer Protection Act also managed to clarify what trading activity was allowed based on the “easily susceptible to manipulation”, allowing the Commodity Futures Trading Commission, or CFTC, to have its own interpretation as opposed to that of the Securities and Exchange Commission, or SEC.

“The bill leaves it up to the agencies and the courts to decide whether a digital asset, other than Bitcoin and Ether, is a security or not,” Warren said. “To date, this approach has not worked well, with significant implications for consumers, which is why the industry has made a number of calls for proactive regulation, rather than regulation by enforcement.”

Speaking to Cointelegraph, Warren said the bill, if passed, would give the CFTC broad authority over the crypto spot market. She said additional legislation and regulatory processes would likely be needed to clarify the SEC’s role — a sentiment echoed recently by Chairman Gary Gensler — adding that there was “a very tight window” to enact such laws given the possible change in leadership after the 2022 Midterm. Choice.

“We feel very strongly that any crypto legislation should be bipartisan in nature.”

Warren added in his written statement that CCI supported provisions in the bill that aim to establish consumer protection standards such as transparency requirements for financial tools and products in the crypto and blockchain space. The legislation also requires a report on underserved communities involved in digital assets.

Related: America’s exceptionalism may be tested as digital assets find a foothold around the world – Sheila Warren

As the former head of data, blockchain and digital assets at the World Economic Forum, Warren explored central bank digital currencies and promoted the adoption of blockchain technology, leaving in February to become executive director of the Crypto Council for Innovation. Formed in April 2021, CCI’s backers include Coinbase, Gemini, Fidelity Digital Assets, Paradigm, Ribbit Capital, Andreessen Horowitz and Block. The organization has focused on supporting issues related to the use of cryptocurrencies and the harmonization of related regulations in the United States and Europe.