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SEC and CFTC Dispute Crypto Oversight Amid Scott’s December Initiative

SEC and CFTC Dispute Crypto Oversight Amid Scott’s December Initiative

Bitget-RWA2025/11/19 05:46
By:Bitget-RWA

- U.S. Senator Tim Scott advocates a December vote on crypto regulatory legislation to resolve SEC-CFTC jurisdiction conflicts over digital assets. - Senate Agriculture Committee proposes expanding CFTC oversight of "digital commodities," while Banking Committee grants SEC authority over "ancillary assets" with decentralization exemptions. - Divergent frameworks highlight tensions between market stability (CFTC) and innovation adaptability (SEC), with unresolved issues like DeFi regulation and dual complia

Tim

Senator Scott, a prominent figure in shaping cryptocurrency legislation, is advocating for a Senate vote in December on a bill package designed to clarify how digital assets are regulated in the United States. This initiative comes as

the ongoing dispute over regulatory authority between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) in the crypto sector.

The proposals, introduced by the Senate Agriculture and Banking Committees, reflect different strategies for establishing oversight boundaries. The Agriculture Committee’s version, led by Senators John Boozman and Cory Booker, would broaden the CFTC’s jurisdiction to cover “digital commodities” and their spot trading, treating cryptocurrencies similarly to established commodities such as oil and gold. Under this plan, exchanges, brokers, and dealers would need to register with the CFTC, comply with capital and custody standards, and keep customer assets separate to avoid conflicts of interest. The plan also

with the SEC for entities that fall under both agencies, or require dual registration, though major topics like decentralized finance (DeFi) are still unresolved.

On the other hand, the Senate Banking Committee’s draft—known as the Responsible Financial Innovation Act—would give the SEC clear authority over “ancillary assets,” which includes fungible digital commodities distributed via investment contracts. This proposal introduces a conditional “escape route” for tokens that can prove they are sufficiently decentralized, enabling them to move from being classified as securities to commodities. For example,

could eventually lose its securities status if its governance meets the new decentralization criteria set by a certification process. The SEC would continue to oversee crypto futures and products tied to securities, while the CFTC would handle spot trading for assets like .

SEC and CFTC Dispute Crypto Oversight Amid Scott’s December Initiative image 0
For those in the crypto industry, the implications are significant. If the CFTC takes the lead on spot markets, it could bring about standardized data practices and greater transparency, which might enhance liquidity for ETFs that still fall under SEC oversight. On the flip side, the SEC’s broader control over ancillary assets could mean stricter disclosure rules for token issuers, especially those with centralized management. Crypto exchanges might have to register with both agencies, navigating two sets of regulations, while DeFi projects remain in a state of regulatory uncertainty .

The existence of these competing proposals underscores the challenges of regulating a fast-changing sector. The Agriculture Committee’s approach focuses on market stability and protecting retail investors, in line with the CFTC’s traditional role in commodities. In contrast, the Banking Committee’s plan aims to build a flexible system that can evolve with new technology, though some critics warn that leaving key definitions for future rulemaking could extend regulatory uncertainty.

With Senator Scott and his colleagues pushing for a December decision, the results could significantly alter the regulatory environment for crypto in the U.S. More defined regulatory boundaries would lower enforcement risks for businesses, encourage institutional participation, and offer clearer guidance for developers and traders. Ultimately, the effectiveness of the final legislation in balancing innovation with investor safeguards will shape its lasting influence on the industry.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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