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New bill would reclassify some crypto as a commodity

In today's crypto corner, Brian Cheung breaks down the latest moves in crypto following a Solana digital wallet hack, and Jennifer Schonberger breaks down a new bill that proposes to regulate bitcoin and ethereum as commodities.

Video transcript

BRIAN CHEUNG: Welcome back to Yahoo Finance Live. 15 minutes to the noon hour here on the East Coast. Let's take a look at where crypto markets are right now. When we take a look at Bitcoin, up almost 2%, if I actually tap that this time, you can see it's up to about 23,000, again extending the increases that we've seen over the course of, let's say-- let's see, for example, the last week or so. Obviously, the big rally happening since the big Fed meeting, which was a week and a half ago. I'm forgetting time right now.

But I do want to highlight Solana right now, which is actually down 2.3% today on intraday. This is after we got some news this morning that, apparently, 8,000 digital wallets have been drained of about $5.2 million in digital tokens. That includes Solana, but also includes USD coin, one of the stablecoins. This after earlier in the week, we already heard about Nomad, one of those crypto blockchain bridges, getting hacked for about $200 million. So some security concerns going on in the crypto space, although, again, you still see some coins this morning rising, Akiko.

AKIKO FUJITA: OK, well, a new Senate bill being proposed today, changing how digital currencies will be defined. Let's bring in Yahoo Finance's Jennifer Schonberger, who just sat in on a call with one of the bill's sponsors. And Jen, I guess this comes down to that debate we've been talking about. Is it a security? Is it a commodity? And who actually oversees all this?

JENNIFER SCHONBERGER: Good morning, Akiko. Senate Agriculture Committee Chairwoman Debbie Stabenow and the committee's top Republican, John Bozeman, dropping a brand new bill this morning that would give the Commodities Futures Trading Commission more regulatory authority to oversee the crypto market and regulate Bitcoin and Ether as commodities. Now this bill would set a national regulatory standard for crypto. It would amend the definition of a commodity to include, quote, the "digital commodity."

So Bitcoin and Ether would fall under that definition, while securities are excluded. Though it's important to note that this bill doesn't define which tokens would constitute commodities, but rather gives authority to the CFTC to regulate those that would be considered commodities.

Now, crypto players will also be held accountable to the same rules as traditional financial brokers and trading platforms. That means that they would require all crypto trading platforms to register with the CFTC. Exchanges would have to monitor crypto trading and report information back to the CFTC in a timely manner. And bankruptcy protections and minimum capital requirements would need to be put in place.

Now, this legislation comes after CFTC chair Rostin Behnam testified before the Senate Agriculture Committee in February that the agency has no authority to oversee the cash market for digital assets, where he sees speculative behavior from investors and leverage that's causing magnified drops during sell-offs.

And guys, this is the second piece of major legislation after senators Lummis and Gillibrand put forth their sprawling bill that would make the CFTC the primary regulator to oversee crypto in lieu of the Securities and Exchange Commission. Senator Stabenow and Bozeman told reporters just now on a call that they hope to schedule a markup on this bill in September, and that they have broad bipartisan support for this, that this is not just a marker bill and they are serious about getting this passed.