Since investors lost money last year due to the abrupt failures of Celsius Network, Voyager Digital, FTX, and other companies, the cryptocurrency industry has been targeted by regulators. The bill approved by the House Financial Services Committee would clarify the Securities and Exchange Commission’s (SEC) purported overreach, define when a cryptocurrency is a security or a commodity, and increase the CFTC’s (Commodity Futures Trading Commission) oversight of the crypto industry. Reps. Jim Himes and Ritchie Torres, two Democrats, joined committee Republicans in supporting the measure. The same bill will be discussed by the House Agriculture Committee on Thursday. Reps. Jim Himes and Ritchie Torres, two Democrats, joined committee Republicans in supporting the measure. The same bill will be discussed by the House Agriculture Committee on Thursday.
“The United States is at risk of falling behind while other countries like the UK, the [European Union], Singapore, and Australia have advanced with clear regulatory frameworks for digital assets. At the markup, Republican Representative Patrick McHenry, chair of the House Financial Services Committee, stated, “We aim to change that today. The markup is the first time a crypto regulatory bill has been put to a vote in Congress, a victory for crypto lobbyists who have pushed lawmakers to provide regulatory clarity for the industry. The markup is where legislation is debated and put to a vote, paving the way for a full vote by the House of Representatives. However, this is by far the most significant legislative event that we’ve had, according to Kristin Smith, CEO of the Blockchain Association. “Obviously, we’ve had some significant decisions come from the courts in the past,” she added. The legislation has inspired many in the cryptocurrency sector, who believe that with Democratic support, it may have a chance of passing the Senate.
The CEO of the DeFi Education Fund, a lobbying organization specializing on decentralized finance, Miller Whitehouse-Levine, stated that anything that is to be persistent “is going to need some bipartisan backing.” However, several Democrats vehemently oppose the bill, notably Representative Maxine Waters (NYSE:WAT), the top Democrat on the Financial Services committee. According to Waters, the bill would lessen protections already available to investors and consumers while also causing greater confusion. “This bill heeds the calls from the crypto industry while disregarding the views of the administration, the Securities and Exchange Commission, and consumer and investor advocates,” she claimed. The bill may potentially run into difficulties in the Democratic-controlled Senate, where Sherrod Brown, chair of the Senate Banking Committee, has expressed doubt about the necessity of further law to regulate cryptocurrency.
The SEC has slowly asserted its control over the cryptocurrency business despite the fact that the majority of cryptocurrencies were initially operating in a legal limbo and weren’t subject to investor protection laws. When the SEC sued cryptocurrency exchanges Coinbase (NASDAQ:COIN) and Binance for failing to register some crypto assets, that effort intensified last month. The two contest the charges. The majority of cryptocurrency businesses contest the SEC’s authority, and they have lobbied Congress in recent months to pass legislation emphasizing that cryptocurrencies are more closely related to commodities than securities. A plan that would have the Federal Reserve establish specifications for the issuance of stable coins while maintaining the authority of state regulators is also scheduled for discussion by lawmakers on Thursday. A change was made to the legislation in response to worries raised by some Democrats, notably Waters, that stable coin issuers would want to be governed by state law in order to avoid tougher regulation. A federal stable coin regime is “not essential,” according to McHenry, who added that there are state frameworks currently in place in an interview with Politico last month. Nevertheless, McHenry expressed optimism that he and Waters would reach an agreement on the bill. On Wednesday, McHenry claimed he had “no news” on his conversations with Waters over the stable coin bill, but the two were still in talks.
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