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The Lummis-Gillibrand Crypto Bill: Summary and Highlights

This post was updated to clarify that most cryptocurrencies would still be governed by the SEC under the Lummis-Gillibrand bill.


Cynthia Lummis’s long-awaited regulatory bill has arrived, providing legal clarity across multiple major sectors of the crypto industry.

Here are the biggest takeaways from the legislation, including info on which cryptos are securities, and taxation of crypto transactions.

  • The Responsible Financial Innovation Act would – if passed – would classify the two top cryptocurrencies right now as commodities – not securities.
  • Specifically, the legislation draws a distinction between “securities” and “ancillary assets”.
  • An ancillary asset is defined as an “intangible, fungible asset that is offered, sold or provided to a person in connection with the purchase and sale of a security through an arrangement or scheme that constitutes an investment contract.”
  • An ancillary asset can also classify as a security, but only if it provides one of the following.
    • A profit or revenue share is extracted from the managerial and entrepreneurial effort of another entity.
    • Debt or equity interest from an entity.
    • Liquidation rights regarding that entity.
    • Entitlement to interest or dividend payments from the entity.
    • Any other financial interest in that entity.
  • Generally speaking, ancillary assets will be presumed to be commodities and not securities. Commodities will be overseen by the CFTC, including trading within the digital asset spot markets.
  • This could increase the likelihood of a Bitcoin Spot ETF being approved, which the SEC has been hesitant to do.
  • Under this legislation, both Bitcoin and Ethereum would be guaranteed as commodities. However, Lummis has clarified that most cryptocurrencies will still be governed by the SEC, as they exhibit security-like properties.
  • Regarding use cases, the bill guarantees the right of the individual to self-custody their cryptocurrency. The EU considered a ban on self-hosted wallets in March following fears that cryptocurrencies could be used for sanctions evasion and escaping the law.
  • Furthermore, users would be enabled to spend their crypto more easily by exempting it from capital gains tax on transactions under $200.
  • The bill also includes profitable news for Bitcoin miners. It would move to make miners’ rewards taxed after they sell their Bitcoin, similar to gold miners. At present, miners must pay tax on coins the moment they are mined.
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This model would create less-forced selling among Bitcoin miners for tax purposes, which could strengthen Bitcoin’s price.

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