In alignment with President Donald Trump’s regulatory efforts to encourage innovation and the wider use of cryptocurrencies in the U.S., Fox journalist Eleanor Terret has reported on a new draft discussion from the House of Representatives. This draft aims to clarify how digital commodities will be treated in the market.
The draft specifies that transactions involving digital commodities will not be regarded as securities, as long as these transactions do not provide buyers with any ownership interest in the issuer’s business, profits, or assets.
Proposed Legislation Clarifies Crypto Transactions
This proposed bill suggests that transactions involving the purchase or sale of digital commodities on the secondary market—rather than from the issuer directly—won’t automatically trigger U.S. securities regulations unless they confer some ownership or claim on the company’s assets or profits. This distinction is vital to create a more favorable environment for cryptocurrency trading and investment.
The draft includes several significant amendments to current laws, especially the Securities Investor Protection Act of 1970. Importantly, it redefines “investment contracts” to exclude specific digital commodities from the securities definition.
This means that transactions involving crypto assets in the secondary market may not be subject to the strict regulations generally applied under acts such as the Securities Act of 1933 and the Investment Advisers Act of 1940.
Matthew Sigel of VanEck Discusses Key Changes
Matthew Sigel, head of digital asset research at VanEck, summarized the key aspects of the draft bill, pointing out several transformative elements.
A significant change is the removal of income and wealth restrictions for retail investors, broadening the market’s audience. Additionally, the bill stops the requirement for accredited investor checks, easing access to crypto investments.
Another crucial point is the introduction of a clear decentralization test, which mandates that no single entity has complete control over a digital commodity. Projects failing this standard will be closely monitored, as any holder owning more than 10% of the project must be disclosed when it remains centralized.
The bill also extends exemptions to decentralized finance (DeFi) protocols, provided they do not hold user funds or exercise discretion over them.
Additionally, the draft clarifies the definition of stablecoins without classifying them as securities, offering important clarity for these increasing digital asset trends. It outlines an optional early registration process for issuers and stresses the need for collaborative rulemaking between the SEC and the Commodity Futures Trading Commission (CFTC), indicating a cooperative approach to crypto regulation.
Image credit: DALL-E, chart from TradingView.com
