July 21, 2024
Policy & Regulation

US Lawmakers Debate Future of Crypto Regulation as Bills Spark Heated Controversy

The United States House Financial Services Committee appears to be divided on the most effective legislative approach to handle regulatory clarity for crypto and blockchain technology.

During a markup hearing on July 26, the committee discussed multiple bills related to cryptocurrency regulation, such as the Financial Innovation and Technology for the 21st Century Act, Blockchain Regulatory Certainty Act, and the Financial Technology Protection Act of 2023. Some members supported the first bill, stating it could prevent incidents like the collapse of the FTX exchange. However, others criticized it, arguing that it favoured crypto firms over consumers.

Committee chair Patrick McHenry explained that the Financial Innovation and Technology for the 21st Century Act aimed to clarify the authority of the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission over payment of stablecoins. However, ranking member Maxine Waters and others expressed concerns that the bill could still allow for the mingling of customer funds, as allegedly happened between FTX and Alameda Research. They suggested the need for an entirely new regulatory structure instead of relying on existing securities laws.

Interestingly, the debate on the bill did not strictly follow party lines. Democratic Representative Jim Himes acknowledged the potential of the legislation to prevent FTX’s collapse but admitted to being less familiar with certain aspects of the crypto space, such as the SEC v. Ripple lawsuit on XRP’s classification as a security. On the other hand, Massachusetts Representative Stephen Lynch strongly criticized the bill, calling it the worst legislation he had encountered in his approximately 20-year tenure in government.

House Republicans proposed allocating $120 million in funding to the CFTC to bolster its resources for regulating the crypto space. However, some Democrats objected, as they believed redirecting funds from the SEC might hinder its enforcement capabilities. The lawmakers continued debating the bills and proposed amendments, with a vote scheduled for July 26.

These bills represent some of the various proposed legislations seeking to address the regulatory gaps in the digital asset space. The SEC has already taken legal action against prominent platforms like Coinbase and Binance and pursued enforcement cases against executives at FTX and Celsius.

Image: Wikimedia

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

Related posts

Crypto Community and Lawmakers Rally Behind Coinbase in SEC Lawsuit

Anna Garcia

Portugal Restricts Worldcoin’s Biometric Data Collection

Bran Lopez

Montenegro’s High Court: Do Kwon Extradition Decision Pending

Kevin Wilson

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Please enter CoinGecko Free Api Key to get this plugin works.