Cynthia Lummis Details 2026 Crypto Bill Splitting SEC and CFTC Roles

• Bill formally splits crypto oversight between SEC and CFTC based on asset structure and economic rights.
• Custody, audit, AML, and recordkeeping rules aim to standardize compliance across crypto firms.
• Stablecoins face bank-only issuance, full reserves, while small crypto payments gain tax relief.

U.S. Senator Cynthia Lummis has outlined how the Responsible Financial Innovation Act of 2026 is intended to resolve long-standing regulatory disputes in the U.S. digital asset market by separating crypto assets classified as securities from those treated as commodities. In a public statement shared on X, Lummis stated that the bill aims to clarify agency oversight while establishing standardized safeguards for investors and market participants.

At the core of the proposal is a statutory division of authority between the Securities and Exchange Commission and the Commodity Futures Trading Commission. Under the framework, crypto assets that do not convey ownership interests, debt claims, or profit rights in a business would fall under the jurisdiction of the CFTC. Assets that represent financial interests in an issuing entity would remain subject to securities laws and SEC supervision.

Lummis said the lack of a clear boundary between securities and commodities has contributed to regulatory uncertainty and enforcement disputes in recent years. The bill aims to establish predictable rules by explicitly assigning oversight responsibilities based on the economic characteristics of each digital asset.

Beyond jurisdictional clarity, the legislation introduces operational requirements for crypto intermediaries and custody providers. Firms holding digital assets on behalf of customers would be required to demonstrate actual possession or control of those assets. Annual verification by independent accounting firms would be mandatory to confirm asset availability and prevent misuse of customer funds.

The act also ties the expansion of consumer protection and market integrity rules to joint approval by the SEC and CFTC. Criminal penalties would apply to violations involving financial recordkeeping, while federal agencies, including the Treasury Department, would assess compliance with anti-money laundering and counter–terrorism financing obligations.

Stablecoin issuance is addressed through strict conditions. Only depository institutions would be permitted to issue stablecoins, and all outstanding tokens would need to be backed by 100% reserves. Issuers would also be required to redeem stablecoins at par value, reinforcing solvency and liquidity standards.

On taxation, the bill proposes an income tax exemption for small digital asset transactions where gains or losses do not exceed $200. The provision is structured to apply to routine purchases rather than investment activity.

The legislative push follows shifting expectations around U.S. crypto policy during 2025, including the outcome of proposals tied to a Strategic Bitcoin Reserve. While an executive order established such a reserve, it consisted solely of Bitcoin already seized by the government, with no new acquisitions authorized. During this period, Lummis announced she would not seek reelection in 2026, adding uncertainty to the future trajectory of crypto legislation.

The Responsible Financial Innovation Act of 2026 consolidates oversight roles, compliance standards, stablecoin rules, and tax treatment into a single framework, reflecting its stated objective of separating securities from commodities within U.S. crypto regulation.