- The US House had a hearing about the latest crypto bill being proposed.
- Coinbase’s legal chief Paul Grewal attended the hearing.
- CFTC chair Rostin Behnam said it may take 4 years for the bill to get implemented without funding.
In the aftermath of significant enforcement actions taken by the Securities Exchange Commission (SEC) against major cryptocurrency exchanges Binance and Coinbase, the US House of Representatives’ agricultural committee convened a hearing to discuss the structure of the digital assets market.
The hearing, held on June 6, featured prominent industry figures and aimed to address a draft bill proposing regulatory guidelines for cryptocurrencies.
Prominent figures in attendance included Coinbase’s chief legal officer Paul Grewal, Robinhood’s chief legal compliance officer Dan Gallagher, former Commodities Futures Trading Commission (CFTC) Chairman Christopher Giancarlo, and current CFTC Chairman Rostin Behnam, among others.
Crypto Bill House Hearing
The hearing sought to examine a proposed bill on crypto market structure put forth by Patrick McHenry, Chair of the House Financial Services Committee, and Glenn Thompson, Chair of the House Agriculture Committee.
The bill, introduced last week, tackles the contentious issue of classifying crypto assets as commodities or securities. It presents a compromise by offering a framework that allows digital assets, previously considered securities, to qualify as commodities if they can demonstrate a sufficient level of decentralization in their blockchain architecture.
This week, the debate surrounding whether crypto assets are commodities or securities has intensified following the SEC’s allegations against Binance and Coinbase for the sale of unregistered securities. Coinbase has been vocal about the lack of clarity from the SEC regarding this matter.
During the hearing, Chairman Behnam of the CFTC expressed his support for the bill’s approach to addressing regulatory challenges faced by digital assets. He praised the committee’s efforts to grant the CFTC additional authority to oversee digital assets but emphasized the importance of avoiding infringement on existing laws.
Crypto Rule May Take 4 Years to Get Implemented Without Funding
Chairman Behnam also cautioned Congress that implementing these regulations could be a lengthy process, with or without adequate funding. With additional funding, he estimated that the rules could be implemented within one to two years, while it might take three to four years without the funding.
Behnam stressed the necessity for Congress to provide the CFTC with the necessary resources to fulfill its new regulatory responsibilities. He stated in his testimony, “Regulation of the digital commodity market will bring new responsibilities to the CFTC that cannot be managed by simply folding the market into our existing regulatory regime with existing resources.” The CFTC’s current budget stands at $365 million, and the agency has requested $411 million for the following year.
The four-hour hearing was divided into two sessions. During the afternoon session, Robinhood’s Gallagher announced that the retail trading platform was actively reviewing the SEC’s analysis to determine the appropriate actions to take regarding tokens listed as securities by the SEC.
Although the 162-page bill has been proposed by key House Republicans, its success as legislation would require support from Democratic lawmakers as well. As the bill progresses, it is crucial to secure bipartisan backing for it to become law.
The hearing provided valuable insights into the ongoing efforts to establish regulatory frameworks for the crypto market, aiming to strike a balance between investor protection and fostering innovation. As stakeholders await further developments, it is evident that the conversation surrounding the classification of crypto assets as commodities or securities will continue to shape the industry’s future.
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