The US Senate Banking Committee has published a draft to discuss the Responsible Financial Innovation Proposal (RFI Act), a legislative project aimed at regulating the Bitcoin market and cryptocurrency infrastructure. The project is in stark contrast to the clear legislation proposed by the House. This is because it assigns an overwhelming role to Bolsa and the Securities Commission (SEC) instead of the Raw Materials Futures Trade Commission (CFTC).
Under the RFI method, almost Cryptocurrency is regulated by the SEC, However, it exempts a significant amount of certain requirements of valuable laws.
The decision to grant key authority to the SEC has a solid foundation. With budgets and staff around six times than CFTC’s, the SEC is better at handling digital assets regulations and protecting retail investors.
However, Bitcoin (BTC) and the cryptocurrency industry have consistently demanded reductions in SEC authors, claiming that focusing too much power on a single entity is harmful to the sector and its participants. This approach is based on recent experience, especially during the management of Gary Gensler, who envisioned the agency’s president in April 2021.
During the five years his management team lasted, Gensler Significantly aggressive stance towards the crypto-active marketreveals from the start of his mission to maintain significant regulatory pressure on the industry that has generated tensions and criticism by actors of the crypto ecosystem, as reported by encryption.
Meanwhile, the SEC experience in traditional value markets probably positions it as a more appropriate entity to oversee such a summary of “additional assets.” The term was introduced in the RFI Law Project and refers to digital assets that are not clearly conformed to values but are regularly advocated by the state.
In contrast, CFTC, which focuses on derivatives and raw materials, faces difficulties, including the resignation and firing of many proxy committee members that limit its operational capabilities.
What does the RFI Act mean for Bitcoin and the cryptocurrency market?
The 2025 RFI Act proposes amending the 1933 Securities Act. This is an ancient regulation of almost a century that has been used to classify digital assets. However, it has been proven to be insufficient for the characteristics and dynamics of the current Bitcoin and cryptocurrency market.
According to the bill, Supplementary assets are defined as intangible and commercially dependent (similar to digital raw materials) is provided, sold or distributed in connection with an investment agreement. However, it does not include assets that grant liabilities, capital, liquidation rights, or other monetary profits.
In that sense, digital assets must comply with the following criteria:
- They do not grant financial rights to the issuer (dividends, participation in profits, benefits, etc.).
- This is distributed along with the value of the furniture (for example, the first offer of coins – ICO).
- Its value depends on its usefulness in a decentralized network and is not a third-party business effort.
If certain conditions are met, the supplementary assets will not be considered value in accordance with federal or applicable state law. This includes self-auttification. The original asset or emitter can present self-automation before the SECbacked by evidence, proof that the asset does not grant financial rights that disqualify it from this line.
Meanwhile, the law requires that the founder of the sub-asset (who initially provides, sells, or distributes the asset) must provide regular spread to the SEC, including corporate information, economic details about the asset and risk factors, unless the value added or negotiated amount of the asset is less than $5 million.
The impact of the RFI law on Bitcoin
The decentralized nature of Bitcoin and the lack of a central founder make it a solid candidate for classification as a supplementary asset. This exempts securities regulations if they are found to be free of financial rights.
The pseudonym and lack of a clear originator for Bitcoin creators can complicate compliance with prevalence requirements, but its massive operations suggest that they qualify for exemptions.
Increased monitoring of illegal activities could lead to greater analysis of Bitcoin transactions on the blockchain, which could affect user privacy.
The effect of the RFI method on ethers.
The ether depends on whether the SEC accepts that Ethereum is no longer controlled by the central group. Its founder may declare that the network has no centralized controlbut the SEC can oppose it. Though it must be noted that US President Paul Atkins stated that ether is not a title of security or value.
Meanwhile, the Ethereum Foundation or related entities must comply with regular adoption that increases operating costs, particularly given the massive amount of Ethereum negotiations.
If the subsidized assets are declared, the ether is exempt from registration. Usually issued of US value. A formal record is required before the SECan expensive and complicated process. However, this exemption allows the subasset to avoid this registration if it meets certain conditions such as early adoption.
The impact of the RFI method on XRP
Token XRP issuer Ripple must demonstrate that his cryptocurrency is unrelated to his business efforts.
In any case, XRP is likely to be classified as a subsidized as a ruling, particularly after the 2023 ruling, which established that it is not the value of a secondary transaction. Ripple can prove that XRP does not recognize financial rightsstrengthens the status of not a value title.
However, Ripple’s critical control over XRP supply can be a hindrance, as the law requires that subsidized assets be not under important general control.
Sales of subsidized assets at $75 million per year (or 10% of the total amount of assets in circulation) are exempt from the previous securities registration requirements of the SEC.
With this exemption, XRP institutional sales are under scrutiny The SEC demand precedent may limit the practical impact of this provision.
Ripple should present regular adoption to the SEC, including information about entities, assets economy and risk factors. This could increase the operating costs of the company, but also increases investor transparency.
To become law, the draft RFI Act must follow a strict legislative process. It will be discussed and potentially amended by the committee after its draft presentation by the Senate Banking Committee and before it is submitted to the Senate vote. If approved, it will be sent to the House of Representatives. There, a process that could take months or years to be approved by the US President, can be in harmony with clear laws and suggestions such as facing clear laws and faces.
