Amid crypto turmoil, senators in US propose sweeping oversight

A bipartisan pair of senators has unveiled what would be the most wide-ranging legislative proposal to regulate cryptocurrencies and other digital assets

A bipartisan pair of senators has unveiled what would be the most wide-ranging legislative proposal to regulate cryptocurrencies and other digital assets, following a series of high-profile busts and failures.

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It’s unclear, though, whether the bill proposed by Sens. Kirsten Gillibrand, D-N.Y., and Cynthia Lummis, R-Wyo., can clear the hurdles of Congress, especially at a time of heightened partisanship ahead of midterm elections. The bill also comes as advocates for cryptocurrency have become bigger — and more free-spending — players in Washington.

The bill unveiled Tuesday, called the Responsible Financial Innovation Act, proposes legal definitions of digital assets and virtual currencies; would require the IRS to adopt guidance on merchant acceptance of digital assets and charitable contributions; and would make a distinction between digital assets that are commodities or securities, which has not been done.

The bill “creates regulatory clarity for agencies charged with supervising digital asset markets, provides a strong, tailored regulatory framework for stablecoins, and integrates digital assets into our existing tax and banking laws," Lummis said in an emailed statement. Stablecoins are a type of cryptocurrency pegged to a specific value, usually the U.S. dollar, another currency or gold.

Lummis has been a vocal advocate for cryptocurrency development and has invested between $150,002 and $350,000 in bitcoin, according to her financial disclosure.

The legislation imposes disclosure requirements on digital asset firms to ensure that consumers can make informed decisions, delineates agency responsibilities over various digital assets — such as Commodity Futures Trading Commission jurisdiction over bitcoin — and requires a study on digital asset energy consumption, among many other proposals.