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06/05 update below. This post was originally published on June 3

BitcoinBTC and ethereumas well as rival top five cryptocurrencies Ripple's XRPXRP and Binance's BNBBNBhave rocketed this year, adding $350 billion to the crypto market in 2023 (triggering a flood of bullish predictions).

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The bitcoin price dropped back last month from its 2023 peak of just over $30,000, dragging on the ethereum price as well as XRP and BNB, even as Goldman Sachs and Microsoft quietly lay the groundwork for the next bull run.

Now, amid fears a crypto "powder keg" could be about to ignite, U.S. lawmakers have proposed a "functional framework" aimed at providing regulatory clarity for bitcoin and crypto companies in the country.

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The 162-page draft bill, unveiled by House financial services committee chair Patrick McHenry, a Republican from North Carolina, and House agriculture committee chair Glenn Thompson, a Republican from Pennsylvania, is an attempt to kickstart discussions between Republicans and Democrats on the two committees, Bloomberg reported.

In recent weeks, some of the largest U.S. bitcoin and crypto companies have warned the country is falling behind the rest of the world on crypto legislation, with Hong Kong's new regulatory regime coming into force this week alongside the Europe Union's landmark markets in crypto assets (MiCA) regulation being signed into law.

Major crypto exchanges, including the Nasdaq-listed Coinbase, have been feuding with regulators over whether certain cryptocurrencies are being sold and traded as unregistered securities. In late 2020, the U.S. Securities and Exchange Commission (SEC) sued Ripple, accusing the company of selling $1.3 billion in unregistered securities via its XRP cryptocurrency (Ripple's chief executive has recently said he's "confident" of an imminent outcome).

06/05 update: The new draft crypto bill comes amid growing fears in the crypto industry that the U.S. government and regulators are involved in a concerted effort to de-platform crypto from the banking system as "operation choke point 2.0"a reference to a 2013 U.S. Department of Justice policy to lock industries thought to be high risk for fraud and money laundering out of the banking system.

"In the U.S., we know its coordinated," Nic Carter, an investor with Castle Island Ventures who coined the term operation choke point 2.0, told the What Bitcoin Did podcast. "We absolutely know that. Its certain officials in the Biden administration that are working together with specific regulators, in particular the bank regulators, to marginalize the bitcoin and crypto industry."

Carter warned that the Biden administration and regulators' hostility to the crypto industry has grown in the aftermath of the FTX meltdown last year and played a part in the collapse of crypto-friendly banks Signature and Silvergate earlier this year.

The new U.S. crypto billafter several attempts to pass crypto legislation in previous sessionsproposes cryptocurrencies offered as part of an investment contract would fall under SEC oversight, while those that qualify as commodities would be overseen by the Commodity Futures Trading Commission (CFTC).

Whether cryptocurrencies such as bitcoin, ethereum, Binance's BNB or Ripple's XRP are defined as securities or commodities would depend on how decentralized their underlying blockchain is, decided by an SEC ruling.

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The bill was cheered by some in the bitcoin and crypto industry ahead of a House agriculture committee hearing on digital asset regulation scheduled for June 6.

The bill "lays a strong foundation for regulatory jurisdiction and definitions," Paul Grewal, the chief legal officer at bitcoin and crypto exchange Coinbase, posted to Twitter. "A comprehensive bill of this magnitude warrants an in-depth review, which well be conducting over the coming days, but what were seeing so far is encouraging."

"Its a win this year for crypto to even get some attention in DC right now, after last year's setbacks," Ryan Selkis, founder at crypto data company Messari, posted to Twitter, adding: "There is still a lot of work to do to get to a viable piece of legislation, but this is a good starting point for a sensible market structure bill."

I am a journalist with significant experience covering technology, finance, economics, and business around the world. As the founding editor of Verdict.co.uk I reported on how technology is changing business, political trends, and the latest culture and lifestyle. I have covered the rise of bitcoin and cryptocurrency since 2012 and have charted its emergence as a niche technology into the greatest threat to the established financial system the world has ever seen and the most important new technology since the internet itself. I have worked and written for CityAM, the Financial Times, and the New Statesman, amongst others. Follow me on Twitter @billybambrough or email me on billyATbillybambrough.com.Disclosure: I occasionally hold some small amount of bitcoin and other cryptocurrencies.

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Congress Introduces A Game-Changing Crypto Bill Amid $350 Billion Bitcoin, Ethereum, BNB And XRP Price Pump - Forbes