House Financial Services Committee Chair Releases Draft Bill on Digital Asset Regulation

House Financial Services Committee Chairman French Hill released a draft of a bill that would create a comprehensive regulatory framework for digital assets, including clarifying oversight responsibilities between the SEC and CFTC.

The "Digital Asset Market Structure Discussion Draft" would, among other things: (i) create a pathway for determining whether a digital asset falls under SEC or CFTC jurisdiction; (ii) assign SEC oversight to digital assets offered through investment contracts or otherwise meeting the securities definition; (iii) authorize the CFTC to oversee digital commodities and related exchanges; (iv) require issuers of restricted digital assets to register with the SEC and disclose information on tokenomics, use of proceeds, governance and source code; (v) permit secondary market trading of restricted digital assets under specific conditions, with required disclosures and SEC-registered exchanges; (vi) establish dual registration for digital asset intermediaries with both the SEC and CFTC under a shared supervisory regime; (vii) impose compliance standards for digital commodity exchanges, including anti-fraud rules and customer protections; (viii) direct the SEC and CFTC to coordinate on rulemakings, joint supervision and enforcement; (ix) mandate studies on decentralized finance and SROs to assess risks, benefits and potential oversight models and (x) preempt conflicting state laws while preserving state authority to police fraud and manipulation.