• May 27, 2022

Senator Reveals That Her Crypto Framework Excludes NFTs

Senator Reveals That Her Crypto Framework Excludes NFTs
  • Wyoming Senator Cynthia Lummis said that the bill she is preparing intends to regulate cryptocurrencies in the same categories as traditional assets
  • She said NFTs are difficult to categorize and therefore would not be addressed in the upcoming bill

Wyoming Senator Cynthia Lummis has revealed more details about the planned pro-crypto regulatory framework, which she is expected to present in collaboration with New York Democratic Senator Kristin Gillibrand.

In an interview with Axios published earlier this week, the US senator explained that the upcoming law would regulate from a point of view so that digital assets fall under the same categories in which traditional assets are regulated. Lummis stated that the bill would split the regulatory “magic wand” and divide it between the Commodity Futures Trading Commission (CTFC) and the Securities and Exchange Commission (SEC).

“We designed it to work within the usual framework for managing and regulating traditional assets. For example, Bitcoin is a commodity. So it would fall under the Commodity Futures Trading Commission for trading purposes and the spot market and the futures market. And then if something fits the Howey test that makes it a security, it would fall under the Securities Exchange Commission.“

Pro-regulation, Pro-innovation

The Republican senator also announced that the proposed framework will not go in the direction of throttling innovations, but will include a mandate to protect users. Lummis explained that she is committed to a framework in which the parties involved “understand the traffic rules, but can still be innovative“.

She added that the current lawless state of affairs in the crypto industry is the reason that regulators, including the SEC, were forced to make spontaneous decisions regarding issues related to the regulation of crypto and the decentralized sector.

NFT remain outside

The Wyoming Republican confirmed that the bill would not cover non-fungible tokens (NFTs), saying,”it’s so hard to figure out how to categorize them“. However, she believes that regulators should help figure out where these tokens can be categorized as they become even more common. The confusion stems from the fact that while NFTs can be traded, most are purchased as rare works of art and therefore cannot be regulated as utility tokens.

She also mentioned a central bank digital currency, but did not go into details.

With regard to the eventual submission of the bill, Lummis was optimistic that he would quickly climb the legislative ladder, since digital assets are impartial.