A few days ago, the Congressman invited key players in the crypto space to formulate the bill on regulating crypto assets. In honor of the invite, the top executives from high-profile crypto firms attended the meeting in two rounds this week.
During the meeting, the crypto leader provided their valuable input crucial in formulating the regulations for digital assets. On June 13, the leaders appeared before the House Financial Services Committee (HFSC) to mull the suitable regulation that will blend in with the hostile enforcement action imposed by the US Securities and Exchange Commission.
Crypto Leaders Participates in Rule Making Process For Digital Assets
At the meeting, the HFSC members presented their Digital Asset Market Structure Discussion draft bill, which they formulated in partnership with the House Agriculture Committee. Commenting on the bill, the chief executive of Circle, Jeremy Allaire, stated that the bill was necessary for regulating the distribution of stablecoins.
Allaire highlighted that the new bill aims at strengthening the value of the digital dollar, which will support the US in gaining a competitive advantage globally.
In his opening statement, Allaire applauded the efforts made by US authorities in the financial sector. He believes such efforts will cement the US dollar at a considerable global market position. Allaire noted that failure to make implicit moves could have affected the US market performance in the future.
On the Tuesday hearing, the committee chairman, Patrick McHenry, who has made indispensable contributions to the drafting of the new bill, pointed out that the new bill could lead to reforms in crypto space and change in the regulatory tools. He stated that the Tuesday hearing would be remembered as years in making.
A review of the new bill revealed that clear regulations will be implemented in governing crypto assets. McHenry explained that the new bill provides the crypto-native community with clear regulations for registering the trading platform with the SEC and other regulatory agencies.
Scope of the Drafted Bill
McHenry mentioned that the new bill provides a clear procedure for transitioning securities to commodities. In support of McHenry’s argument, the chief executive of AVA labs, Emin Gun Sirer, stated that some blockchain and crypto assets have minimal operations in the financial sector.
He stated that if the blockchain network has no financial functionality, the regulators should excludes such digital assets from the rules.
Sirer argued there was a need to revise the crypto asset regulations since some digital assets can be used for different purposes. A few days ago, confusion about the function and features of crypto assets arose when the SEC charged Binance and Coinbase for violating securities regulations.
In their June 5 report, the SEC accused Binance and Coinbase of providing unregistered securities and failing to comply with the registration requirements. The SEC stated that Binance provided falsified information to misguide the regulators and engage in comingling of customers’ assets.
Nonetheless, other executives condemned the SEC enforcement action, which was opaque and uncertain.
Democrats Oppose the New Bill
In a separate writing, the democrats expressed concern about adopting the draft bill. According to Maxine Waters, the California representative confessed that the Democrats required more time to review the bill before giving their final thoughts.
However, the Democrats are against a bill section allowing crypto firms to seek provisional registration. The democrats protested that the crypto firms shouldn’t be allowed to provide relief or any donations to firms facing SEC legal action.
Elsewhere Stephen Lynch, the Massacheusset representative, stated that the new bill undermined the SEC enforcement action. Reffering to the bill, California representative Brad Sherman stated that the new bill supports the moves made by former FTX chief executive Sam Bankman-Fried. He added that Bankman-Fried should remain behind bars.
In December, Bankman-Fried was charged with engaging in multiple financial crimes such as bribery, supporting political campaigns, and misuse of customers’ funds. Before his arrest, Bankman-Fried has actively supported Congress to supervise the crypto sector.
