Lawmaker considers crypto regulation with SEC lawsuits.
Members of the United States House Financial Services Committees met to discuss the need for clarity in the digital asset ecosystem, especially after the Securities and Exchange Commission (SEC) took legal action against crypto firms. During a hearing on June 13, the ranking member, Maxine Waters, stated that Democrats were carefully examining a proposed framework introduced by Republicans on digital asset regulation. The committee chair, Patrick McHenry, said that he expected bipartisan input on a draft bill, with markups following a congressional recess in July. Waters expressed concerns that without thorough analyses and collaboration between the two parties, the digital asset legislation could potentially lead to fraud and misuse of customer funds. She cited examples such as the collapse of FTX, criminal charges against former CEO Sam Bankman-Fried, and the SEC’s recent actions against Binance and Coinbase.
The draft bill introduced on June 2 would prohibit the SEC from denying digital asset trading platforms from registering as a regulated alternative trading system and allow such firms to offer “digital commodities and payment stablecoins.” It would also restructure the roles of the SEC and Commodity Futures Trading Commission (CFTC) in regulating digital assets in the United States. However, Waters expressed concerns that the Republican bill could allow crypto firms that are being sued for violating securities laws to continue doing business through provisional registration.
During the hearing, Prometheum founder and co-CEO Aaron Kaplan suggested that the best way forward is the application of federal securities laws through the SEC. Meanwhile, Ohio Rep. Warren Davidson proposed legislation that would restructure power at the SEC and fire SEC chair Gary Gensler, in response to the seeming regulation-by-enforcement approach by the SEC. Binance.US has pushed back against the SEC’s efforts to freeze its funds, with a District of Columbia federal judge currently considering competing motions from the SEC, Binance, and Binance.US on how to handle the assets and other pending legal actions.