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Senator says most cryptocurrencies are securities, contradicting the bill she just introduced

June 8, 2022, 6:01 PM UTC

Sen. Cynthia Lummis (R-Wyo.) introduced major crypto legislation this week that would designate most cryptocurrencies as “commodities.” 

The move prompted backlash from several critics of the crypto industry, who argued that cryptocurrencies are securities, and should be regulated by the Securities and Exchange Commission. 

That’s why it was surprising when on Wednesday Sen. Lummis seemed to do an about-face, and agree that most cryptocurrencies are, in fact, securities.

When asked during a Washington Post live event what she thought about SEC chair Gary Gensler’s vocal position that most cryptocurrencies are securities, Lummis responded: “I agree with him.” She added that Bitcoin and Ethereum are, in her opinion, not securities and should be regulated by the Commodities Futures Trading Commission (CFTC), Market Watch first reported.

Fortune was not immediately able to reach Lummis for additional comment.

The remarks come in stark contrast to the language in a press release for the Responsible Financial Innovation Act, which Lummis introduced along with Sen. Kirsten Gillibrand (D-N.Y.), which says that “most digital assets are much more similar to commodities than securities.”

Lummis and Gillibrand’s proposed bill puts much of the power for regulating cryptocurrencies in the hands of the CFTC rather than the SEC, a point that has drawn criticism from several critics of the cryptocurrency market. 

Dennis M. Kelleher, the CEO of nonpartisan financial reform advocacy group Better Markets, said in a statement Tuesday that the Senate crypto bill is playing into the hands of the crypto industry.

“The tell is that the bill gives the industry what it wants most: the Commodities Futures Trading Commission (CFTC) as its primary regulator, even though it exists to police markets where physical producers and purchases of commodities like corn, wheat, oil, natural gas, hogs, and cattle hedge their price risk to facilitate the delivery of everyday goods to the American people,” Kelleher said in a statement.

Even CFTC chairman Rostin Behnam, who also spoke at the Washington Post live event on Wednesday, said that “probably hundreds” of cryptocurrencies are securities that should register with the SEC. 

Gensler, who has called the crypto industry “the Wild West,” has been loud about his belief that many cryptocurrencies are securities, a designation that comes with strict regulations and disclosure rules. He has become one of the most criticized figures in crypto, and some in the sector have accused him of stifling innovation. 

Sen. Gillibrand, Lummis’s co-sponsor, also spoke at the live event, saying that her bill is not meant to cut out the SEC as a regulator.

“We aren’t minimizing the role of the SEC,” she said.

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