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US Congress Holds First Joint Committee Hearing on Crypto Legislation

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The US House of Representatives’ House Financial Services Committee and House Agriculture Committee held the first-ever joint hearing on cryptocurrency legislation on Wednesday. The hearing, titled “The Future of Digital Assets: Measuring the Regulatory Gaps in the Digital Assets Market”, focused on carving a path forward to legislation on digital assets. The early stages of the hearing proved combative, with certain Democrats questioning whether crypto-specific legislation should be signed at all.

A Focus On Making Law

HFSC chairman Patrick McHenry announced that the hearing would take place this month, confirming that it would relate to the market structure surrounding digital assets. In his opening remarks, McHenry stressed that “the purpose here is to make law.” His counterpart and ranking Democrat within the committee, Maxine Waters, agreed, citing limits in the Security and Exchange Commission (SEC)’s authority to go after fraudulent crypto firms.

Stephen Lynch, the senior Democrat on the digital assets subcommittee, claimed that creating new legislation for digital assets seems redundant and unnecessary. However, SEC chairman Gary Gensler has repeatedly stated that the laws on the books provide his agency with ample authority to regulate crypto. The Commodities and Futures Trading Commission (CFTC) has been at odds with the SEC for years, arguing that the CFTC has more authority over crypto than Gensler recognizes.

Crypto’s Future in the United States

Brad Sherman – a Californian Democrat and prominent crypto critic – questioned whether digital assets should even have a future in the United States, claiming that cryptocurrencies diverts capital investment from useful industries. HFSC Chair McHenry concluded the hearing by claiming that the SEC’s current approach to disclosure statements and registrations “don’t work for digital assets” and that the CFTC needs additional authority over the market. Last month, McHenry said he expects that the President will have signed some piece of crypto legislation into law within the next 12 months.