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Senator Kirsten Gillibrand, co-author of the landmark crypto regulation bill revealed yesterday, says the presidents of the SEC and CFTC agree on the status of Bitcoin and Ether as goods. However, she and Senator Cynthia Lummis also agree that the majority of other cryptocurrencies are securities.
Ethereum in the Clear
Senators Gillibrand and Lummis discussed their bill with Washington Post Live on Thursday. They broke down their criteria to define a digital asset as a commodity, a security, or the new "ancillary asset".
As lummis explained, ancillary assets could include nonfungible tokens or digital assets that are neither stocks of value nor means of payment.
Securities, on the other hand, would be defined using criteria set out by the Howey test in the 1930s, with additional specifications. Tokens considered securities could include tokens that confer "voting rights", "dividend payments" or "profit/income units" to their holders, among other things.
Gillibrand stated that their bill would allow both the dry and cftc to regulate the crypto market. Whereas the sec would probably be responsible for overseeing most cryptos, the "lion's share" of the crypto market would fall under the cftc, including bitcoin and ethereum.
"If you're like Bitcoin, and creating a proof of work or proof of chip game type, you may well be a commodity," said gillibrand.
The senators clarified that while the president gensler has not yet read their bill, he and the president cftc agree on their bitcoin and ethereum classifications.
"Bitcoin and Ether would definitely be commodities – and this is agreed by President Gensler, as well as the President of the CFTC."
The reveal may be surprising given Gary Gensler’s hesitancy to clear Ether’s status as a commodity in the past. In fact, while teaching a blockchain-focused course in 2018, Gensler said that he thought Ether passed the Howey Test when first launched.
Addressing Partisanship
Lummis was also asked about the political divide that currently plagues Bitcoin. Indeed, the progressive wing of the senate, including senate banking committee members like Elizabeth Warren and Sherrod Brown appear most skeptical of the asset and industry.
Meanwhile, the three senators that are known to own Bitcoin personally – pat toomey, cynthia lummis, and ted cruz – are all Republicans.
The same pattern has emerged within the sector itself. Democrat members like chairman Gensler have frequently leaned toward more cautious market protection, while the Republican “crypto mom” Hester Pierce wishes to approve a Bitcoin spot ETF.
As a democrat, Kirsten Gillibrand argued that progressives can find more love in cryptography by recognising their ability to democratize financial access. She also says that cryptocurrency can support immigrant communities by allowing instant, low-cost payments.
