Breaking Down The New US Crypto Market Structure Bill Draft: 6 Key Insights

In line with US President Donald Trump’s regulatory agenda aimed at fostering innovation and broader adoption of cryptocurrencies in the country, Fox journalist Eleanor Terret has reported that a new market structure discussion draft from the House of Representatives aims to clarify the treatment of digital commodities.

Specifically, it asserts that transactions involving the sale of digital commodities will not be classified as securities, provided these transactions do not grant purchasers any ownership interest in the issuer’s business, profits, or assets. 

Proposed Legislation Seeks Clarity On Crypto Transactions

This proposed legislation indicates that if an individual buys or sells digital commodities on the secondary market—rather than directly from the issuer—the transaction will not automatically trigger US securities laws unless it confers some form of ownership or claim on the company’s profits or assets. This distinction is crucial for fostering a more favorable environment for crypto trading and investment.

The draft bill outlines several critical amendments to existing laws, particularly the Securities Investor Protection Act of 1970. Notably, it defines “investment contracts” in a manner that excludes certain digital commodities from being classified as securities. 

This means that secondary market transactions involving crypto assets may not be subject to the stringent regulations typically applied to securities under various acts, including the Securities Act of 1933 and the Investment Advisers Act of 1940.

VanEck’s Matthew Sigel Highlights Key Changes 

Matthew Sigel, head of digital asset research at asset management firm VanEck, summarized the implications of the draft bill by highlighting several key points. 

One major change is the removal of income and wealth limits for retail buyers, which opens the market to a broader audience. Additionally, the bill eliminates the need for accredited investor checks, simplifying access to investment opportunities in crypto assets

Another important aspect of the draft is the introduction of a clear decentralization test, which requires that no single entity has unilateral control over a digital commodity. Projects that do not meet this criterion will face scrutiny, as holders of more than 10% of the project must be disclosed while it remains centralized. 

The bill also provides exemptions for decentralized finance (DeFi) protocols, as long as they are non-custodial and do not exercise discretion over user funds.

Moreover, the draft defines stablecoins without categorizing them as securities, providing much-needed clarity for these increasingly popular digital assets. 

It also outlines an optional early registration path for issuers and emphasizes the need for joint rulemaking between the SEC and the Commodity Futures Trading Commission (CFTC), further signaling a collaborative approach to crypto regulation.

Featured image from DALL-E, chart from TradingView.com