After years of flying under the government’s radar, the cryptocurrency industry is facing major regulation

Sens. Debbie Stabenow (D-Mich.) and John Boozman (R-Ark.) introduced a bipartisan bill that would give regulatory authority over cryptocurrencies to the Commodities Futures Trading Commission. Under the bill, all cryptocurrency platforms — including traders, dealers, brokers, and sites that hold crypto for customers — would be required to register with the CFTC.

CFTC chair and former Stabenow aide Rostin Behnam recently testified before the Senate Committee on Agriculture, Nutrition, and Forestry, which has authority over the CFTC. In the testimony, Behnam stated that the CFTC needs more authority to properly regulate crypto. Stabenow and Boozman lead the Senate committee.

Calls for more oversight over crypto have peaked this year as prices across the industry continue to collapse since their peak last November. Bitcoin, the most widely used cryptocurrency, is currently trading at a fraction of its all-time high, down from more than $68,000 in November 2021 to about $23,000 this week.

The Securities and Exchange Commission (SEC) has served as the primary regulatory agency of cryptocurrency in recent years. Other members of Congress, as well as consumer advocates, have suggested that regulatory authority should lay with the SEC as opposed to the CFTC. The CFTC had a budget last year of $304 million with roughly 666 employees. In contrast, the SEC had a budget of nearly $2 billion and 4,500 full-time employees, according to the Associated Press.

The AP also reports that passage of the Stabenow-Boozman bill would be considered a win by the cryptocurrency industry, which sees the CFTC as a more “industry-friendly” regulator than the SEC. The cryptocurrency industry is “trying to get anyone other than the SEC to regulate them,” said Cory Klippsten, CEO of Swan Bitcoin.

This bill is the latest in federal efforts to reign in the crypto market. In June, Sens. Kirsten Gillibrand (D-N.Y.) and Cynthia Lummis (R-Wyo.) proposed a sweeping bill called the Responsible Financial Innovation Act. That bill would require the IRS to adopt guidance on digital assets and would make a distinction between digital assets that are commodities and those that are securities. It also names the CFTC as crypto’s primary regulator.

Earlier this year, President Biden issued an executive order calling on agencies to look at ways to regulate digital currencies. This followed the administration’s 22-page report last November calling on Congress to pass crypto regulation.