NEW DELHI: The US House of Representatives passed a bill on Wednesday that aims at establishing a new legal framework for digital currencies, with a vote of 279-136.
However, the US securities regulator Securities and Exchange Commission (SEC) had issued a warning, stating that the bill could potentially create new financial risks.
Meanwhile, the supporters of the bill argue that it will provide regulatory clarity and help promote the growth of the industry.
This development coincides with the SEC signaling its likely approval of applications for spot ether exchange-trade funds.
SEC chair Gary Gensler while expressing concern, said that this bill, "would create new regulatory gaps and undermine decades of precedent regarding the oversight of investment contracts, putting investors and capital markets at immeasurable risk."
Additionally, Gensler believes that cryptocurrencies should be subject to the same laws as other assets, citing high-profile prosecutions, fraud cases, bankruptcies, and failures.
He, in his statement on Wednesday, criticized the bill, stating that investment contracts recorded on a blockchain would no longer be considered securities, denying investors protection under securities laws.
He further pointed out that the bill would allow issuers of crypto investment contracts to self-certify their products as digital commodities, leaving the SEC with only 60 days to challenge this classification.
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