Gillibrand and Lummis state that most altcoins are securities

189
SHARES
1.5k
VIEWS


Senators Kirsten Gillibrand and Cintia Lumis believe that most altcoins would be considered securities under their proposed new law – but confirmed that bitcoin (BTC) and ether (ETH) would be classified as commodities.

Both Loomis and Gillibrand agreed with Securities and Exchange Commission Chairman Gary Gensler’s assessment that the majority of cryptocurrencies under the Howe Test are securities with Gillibrand:

READ ALSO

“Most Cryptocurrencies Go to the SEC” […] Bitcoin and Ether will certainly be commodities, and it has been agreed upon. This is in agreement with Chairman Gensler as well as the Chairman of the CFTC. ,

Gillibrand emphasized reports characterizing the law as making the CFTC the primary regulator. “I don’t think the CFTC is the primary regulator,” she said. “They only have an obligation to regulate bitcoin and ether, most cryptocurrencies today.”

The pair made the remarks during a Washington Post event on June 8, a day after the Responsible Financial Innovation Act details were released.

Commodity Futures Trading Commission (CTFC) President Rostin Behnum was also at the event and took a slightly different view on the ratio of altcoins which are securities. He added that while there are “probably hundreds” of coins that mimic security coins, there are also many commodity coins such as bitcoin (BTC) and ether that should be regulated by the CFTC.

“It is very clear that many digital assets repeat themselves or look like commodities. They are more like stores of value than securities.”

Tony Tuths, head of the digital assets team at KPMG Tax, told Cointelegraph that the law, under its current form, is unlikely to “go ahead” in the near future, adding that it was unclear which coins would eventually come under the SEC’s purview. CTFC Vs.

“The law on the regulatory side calls for the CFTC to be the primary regulator, but then produces a wide range of tokens with characteristics similar to securities for regulation by the SEC. A struggle to understand exactly what is in the SEC bucket. But it may be the exception that swallows the rule.”

related: Class action suit against Coinbase alleging unregulated securities sales

The new bipartisan bill is expected to rely heavily on the Howe test to determine whether a particular coin is classified as a security or commodity.

“We are trying to fit the world of digital assets into our existing regulatory framework. […] We spent a lot of time on the definition of the modern Howe test,” Senator Lumis said during a June 7 CNBC interview.

The Howe Test is a framework set forth by the US Supreme Court to determine whether a transaction qualifies as an investment contract, and is thus considered a security.

The Howe test has become a focal point in the SEC’s case against Ripple, which began in December 2020, alleging that the company used its digital token XRP to raise funds in 2013, and was an unregistered security at the time. There was a token.