Hill Delivers Remarks at Hearing on Identifying the Regulatory Gaps in Digital Asset Market Structure
Washington,
April 27, 2023 -
Today, the House Financial Services Subcommittee on Digital Assets, Financial Technology and Inclusion, led by Chairman French Hill (AR-02), is holding a hearing entitled “The Future of Digital Assets: Identifying the Regulatory Gaps in Digital Asset Market Structure.”
Watch Chairman Hill’s opening remarks here.
Read Chairman Hill’s opening remarks as prepared for delivery:
“Good afternoon and thank you for joining us at today’s hearing entitled The Future of Digital Assets: Identifying the Regulatory Gaps in Digital Asset Market Structure.
“We have a unique opportunity as Members of this Subcommittee to be on the cutting edge of creating a functional framework for the digital asset ecosystem.
“At this very moment, Members on the House Agriculture Committee are also holding a similar hearing discussing the same issues.
“That means more than 40 members have an opportunity to work together to ensure that our regulatory frameworks embody the key principles of the same activity, same risk, same regulation.
“Moreover, we will be holding a joint hearing next month with the House Agriculture Committee to explore these issues together.
“Two committees working hand in hand on a joint legislative product like this is unprecedented, and I believe it vastly increases our chances of getting it right.
“Why is legislation needed?
“The SEC and the CFTC have highlighted an impossible situation, where firms are being subject to enforcement actions from both agencies regarding the same digital asset.
“Absent legislation, our regulators are only pushing entrepreneurs, developers, and job creators offshore.
“We have a responsibility to protect our constituents. There are glaring gaps in consumer and investor protections, and regulation by enforcement does nothing to fill these gaps.
“Today, we are going to dive into the current rules that govern our securities and commodities markets and assess how we can address potential gaps in digital asset market structure legislation.
“First, we will examine the current test to determine if a digital asset is offered as part of an investment contract, and therefore a security.
“Currently, the SEC and CFTC disagree on the classification of many digital assets, which is unworkable for entrepreneurs and consumers. The agencies need direction from Congress.
“Second, the current disclosure regime does not produce information that a reasonable consumer would need to know before purchasing a digital asset.
“The information that is relevant to a purchaser of a digital asset is different from the information that is relevant when an investor considers buying stock of a public company.
“And third, we will explore whether digital asset trading platforms perfectly fit under existing laws and regulations and the rules applicability to digital asset trading platforms.
“We have a diverse and knowledgeable panel before us today.
“Their experiences will help us understand how we can fill current gaps and build functional frameworks.
“I implore members of this subcommittee to be thoughtful and open-minded with their questions as we seek to do a deep dive into the current regulatory requirements.
“I hope we can work together to ensure our digital asset market structure frameworks help retain our rightful place as the global leader in financial innovation.”
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