The Senate Banking Committee Provides an SEC-focused Crypto Market Structure Bill. Dylan Unruh, Dartmouth College.
A new draft Senate Banking Committee bill could significantly reshape how digital assets are regulated, potentially exempting most secondary market transactions from securities laws while enabling innovation, and combating illicit financial activity. Legislative Framework Rather than invent a new asset class, as the CLARITY Act does, the Senate Banking Committee has opted to amend the Securities Act of 1933 to include digital commodities under definition of ancillary assets and define ancillary asset originators as the initial distributors of ancillary assets. An ancillary asset is often sold within an investment contract; however, the asset itself is not a security. Therefore, non-security based transactions, meaning most secondary transactions, are exempt from securities laws. The SEC is mandated to create a process, similar to the CLARITY Act’s maturity certification, for ancillary asset originators to apply for disclosure requirement exemptions. To standardize the application of s...