On May 5, 2025, the US House of Representatives Financial Services Committee and Agriculture Committee released a draft bill that would shift oversight of most digital assets from the Securities and Exchange Commission (SEC) to the Commodity Futures Trading Commission (CFTC). Specifically, the draft bill would amend the definition of “security” in the Securities Act of 1933 and the Securities Exchange Act of 1934 to expressly exclude “digital commodities.”
To fall within the digital commodity definition, digital assets must come from “mature blockchain systems” – open-source, decentralized, fully automated networks – with no single entity owning more than 20% of the token supply.
The draft bill further proposes that secondary market trading of digital commodities, under specific conditions, would not be subject to SEC oversight. These exemptions for secondary transactions would not apply if the transactions involved purchasing an interest in the revenues, profits or assets of the issuer – more akin to equity or institutional offerings.
As written, the draft bill appears to exempt from SEC regulation the issuance and secondary trading of many of crypto’s most popular tokens, such as Ethereum, Solana, BNB, and Cardano, all seemingly meeting the definition of “digital commodity.” The draft bill sets forth procedures for how digital commodity exchanges would register with and be regulated by the CFTC.
Takeaways
Democrats in Congress appear poised to oppose the draft bill. Indeed, on May 6, 2025, several House Democrats walked out of a digital assets hearing where the draft bill was expected to be discussed. However, if passed, the bill would dramatically alter the way digital assets are regulated in the United States and grant the crypto industry’s long-standing request to make the CFTC rather than the SEC its primary regulator.
By defining certain digital assets as digital commodities, this bill would likely reduce compliance burdens and provide clearer regulations for the industry. First, tokens qualifying as digital commodities would not need to comply with the registration and disclosure requirements of federal securities laws. Second, crypto trading platforms that list digital commodities would likely not need to register as securities exchanges under the secondary trading exemption.
If the bill were to pass, meeting the criteria for a “mature blockchain system” could be challenging for new crypto projects issuing tokens on their own blockchain. The process of a blockchain becoming sufficiently decentralized and fully automated can take time and significant outside commitment.
In any event, the draft bill is aligned with the Trump administration’s goal of promoting crypto, and it seeks to do so by drawing clearer lines of regulatory authority between the SEC and the CFTC.
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