Legislation would increase consumer protections and help prevent future FTX-like failures
WASHINGTON, D.C. – Today, U.S. Senators Cynthia Lummis (R-WY), a member of the Senate Banking Committee, and Kirsten Gillibrand (D-NY), a member of the Senate Agriculture Committee, reintroduced the Lummis-Gillibrand Responsible Financial Innovation Act to create a comprehensive regulatory framework for crypto assets. This legislation greatly expands on the bill the senators introduced last year and adds strong new consumer protections and safeguards to further strengthen the industry against fraud and bad actors, while giving American innovators the chance to thrive.
“Crypto assets are constantly evolving, and as the industry changed during the last year, Senator Gillibrand and I worked to improve our legislation to ensure it appropriately balances consumer protections while allowing innovation to continue,” said Senator Lummis. “Make no mistake, bad actors exist, but we cannot lose sight of the potential of crypto assets and distributed ledgers to modernize our financial industry. I’m proud to join my friend Senator Gillibrand in reintroducing the Responsible Financial Innovation Act to ensure the United States remains the global financial leader.”
“I am proud to release this new, strengthened version of the bipartisan Lummis-Gillibrand Responsible Financial Innovation Act with my friend and partner Senator Lummis,” said Senator Gillibrand. “Over the past year, we worked together and with key stakeholders to improve our framework–we added strong new consumer protections and anti-money laundering provisions, delivered additional resources to regulatory agencies so they can enforce new regulations, and created clarity so that businesses can innovate responsibly. Congress has a duty to step in to protect consumers and root out bad actors, while also creating a transparent and accountable market. Our framework does that and we will make passing this bipartisan legislation a priority in this Congress.”
This legislation places crypto assets within the regulatory perimeter, requires all crypto asset exchanges to register, addresses decentralized finance, safeguards consumers through enhanced disclosures and limits on crypto asset lending, closes the wash sale loophole and codifies the criteria to determine which crypto assets are securities or commodities.
The legislation also combats the use of crypto assets in illicit finance, imposes new penalties for willfully violating money laundering laws, requires stablecoins to be issued by depository institutions and provides appropriations to federal agencies to implement the policies within the bill.
Substantial feedback from stakeholders was incorporated into the legislation, including regulatory agencies such as the SEC and CFTC, experts in illicit finance, technologists and financial institutions.
For a section by section of the bill, click here.
For a look at what’s new in this version of the bill, click here.
To read the full bill text, click here.