Senate Ag Committee’s draft crypto legislation gives new authority to CFTC, leaves key issues unresolved

The Senate Agriculture Committee has released its long-awaited draft legislation to regulate the cryptocurrency industry at large, giving new authority to the U.S. Commodity Futures Trading Commission. 

The discussion draft, released Monday by Sen. John Boozman, R-Ark., and Sen. Cory Booker, D-N.J., builds upon work done in the House over the summer, according to a statement. 

“More  Americans are engaging with novel financial markets and payment systems than ever before, and Congress must take steps to strengthen and expand regulatory frameworks to protect consumers from predatory practices, keep our markets safe, and prevent bad actors from exploiting regulatory gaps,” Booker said in a statement.

The House passed its version of a bill to regulate the crypto industry in July, called the Digital Asset Market Clarity Act, or just Clarity for short. Since then, the Senate has been working on its own legislation. The Senate Banking Committee, led by Republicans, has a draft that looks to allocate jurisdiction between the U.S. Securities and Exchange Commission and CFTC, as well as create a new term for “ancillary assets” to clarify which cryptocurrencies are not securities. 

The Senate Agriculture Committee’s version is vital, given that the agency has jurisdiction over the CFTC. 

The 155-page discussion draft defines digital commodities as “any fungible digital asset that can be exclusively possessed and transferred, person to person, without necessary reliance on an intermediary, and is recorded on a cryptographically secured public distributed ledger.” The draft also creates a CFTC regulatory regime over those assets. 

‘Unresolved issues’

Booker said more work needs to be done and said he had specific concerns about the CFTC’s resources. Whether or not the CFTC, which has 543 full-time staff compared to 4,200 at the SEC, has the funding to take on the new jurisdiction of digital assets has come up in congressional hearings. 

“I’m specifically concerned about the lack of resources and the bipartisan commissioners at the CFTC, preventing regulatory arbitrage, as well as the ongoing corruption of public officials and whether Congress has created the correct guardrails to prevent those misdeeds,” Booker said in the statement.

According to a representative, the Ag Committee’s draft includes a “new funding stream” for the CFTC. In a section of the draft, it says that the CFTC should collect fees from unspecified crypto entities.

Brackets are also included throughout the draft, which reflects “unresolved issues,” according to the statement. A person familiar told The Block that the brackets indicate issues that still need to be resolved by both parties.

One of the bigger roadblocks for Democrats has been around President Donald Trump’s conflicts of interest. Bloomberg estimated in July that the sitting president has profited some $620 million from his family’s crypto ventures, including the World Liberty Financial DeFi and stablecoin project, which lists Trump and his three sons as co-founders. The family also has a 20% stake in the mining firm American Bitcoin, and legislators have repeatedly raised concerns about the free-floating TRUMP and MELANIA memecoins launched the weekend before Trump took office.

The Senate Agriculture draft includes language on conflicts of interest. 

On Monday, Crypto Council for Innovation CEO Ji Hun Kim said the discussion draft was “meaningful positive progress.” 

“Momentum continues to build for clear, risk-based rules that promote innovation, protect consumers, and strengthen U.S. competitiveness,” Kim said in a statement.  

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