WASHINGTON: A key congressional committee on Wednesday advanced a bipartisan bill that aims to develop a regulatory framework for cryptocurrencies, a milestone for Capitol Hill in its efforts to codify federal oversight for the digital asset industry.
The crypto industry has been in the regulatory crosshairs since investors were burned last year by sudden collapses of Celsius Network, Voyager Digital, FTX and other companies.
The bill passed by the House Financial Services Committee would define when a cryptocurrency is a security or a commodity and expand the Commodity Futures Trading Commission’s (CFTC) oversight of the crypto industry, while clarifying the Securities and Exchange Commission’s jurisdiction, as many crypto advocates complain of the agency’s perceived overreach.
A handful of Democrats, including Reps. Jim Himes and Ritchie Torres, joined committee Republicans in voting for the bill. The House Agriculture Committee is scheduled to consider the same bill Thursday.
“As other jurisdictions like the UK, the [European Union], Singapore and Australia have moved forward with clear regulatory frameworks for digital assets, the United States is at risk of falling behind. We intend to change that today,” said Representative Patrick McHenry, the Republican chair of the House Financial Services Committee, at the markup.
The markup – where legislation is debated and brought to a vote, paving the way for a full vote by the House of Representatives – is the first time a crypto regulatory bill was put to a vote in Congress, a victory for crypto lobbyists who have pushed lawmakers to provide regulatory clarity for the industry.
“Obviously we’ve had some important decisions come from the courts in the past, but this is by far the most significant legislative moment that we’ve had,” said Kristin Smith, CEO of the Blockchain Association.
The bill has galvanized many in the crypto industry, who say that with Democrats’ support, the bill could have a shot in the Senate.
“For anything to be sticky, it’s going to need some bipartisan backing,” said Miller Whitehouse-Levine, CEO of the DeFi Education Fund, a lobbying group focused on decentralized finance.
But some Democrats, including Representative Maxine Waters, the top Democrat on the Financial Services committee, fiercely oppose the bill.
Waters said the bill would create more confusion and offer consumers and investors fewer protections than they have currently.
“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 said.
