Regulating Digital Assets: FIT21 Seems to Fit the Bill

In Short

The Situation: The United States lacks a regulatory framework geared toward digital assets. This raises consumer protection concerns, causes regulatory turf battles and duplicative enforcement actions, impedes innovation, and puts the United States at a disadvantage compared to markets like the European Union, which have already implemented regulatory measures.

The Solution: Recently proposed (and likely soon to be re-proposed) legislation would split regulation of digital assets between the Commodity Futures Trading Commission ("CFTC") and the Securities and Exchange Commission ("SEC") and impose clear disclosure, registration, and compliance requirements. This should better protect market participants, reduce or eliminate ostensibly duplicative regulatory burdens, and foster innovation by providing clarity as to the applicable regulatory structure for digital assets.