Hill Delivers Remarks at Joint Hearing on Measuring the Regulatory Gaps in the Digital Asset Markets
Washington,
May 10, 2023 -
Today, the House Financial Services Subcommittee on Digital Assets, Financial Technology & Inclusion, led by Chairman French Hill (AR-02), is holding a joint hearing with the House Agriculture Committee’s Subcommittee on Commodity Markets, Digital Assets, and Rural Development entitled “The Future of Digital Assets: Measuring the Regulatory Gaps in the Digital Asset Markets.”
Watch Chairman Hill’s opening remarks here.
Read Chairman Hill’s opening remarks as prepared for delivery:
“Good morning and thank you for joining us today at our hearing on digital asset market structure.
“I am grateful to my friends over at the House Agriculture Committee for partnering with us on this unprecedented joint hearing and working with us to craft legislation, and for our Democratic colleagues for working with us through today’s joint hearing.
“What we decide to do in this Congress, this year, will shape whether the digital asset ecosystem has the opportunity to thrive in the United States.
“But right now, there is not a workable framework in place for digital asset issuers and intermediaries to be regulated by the SEC or CFTC.
“I’ve heard a few members in this room say that the status quo of existing laws is enough, that crypto firms are just willfully avoiding compliance with the law, and that Republicans are embarking on a partisan pursuit of sweeping digital asset legislation.
“But the reason I know this can’t just be a partisan exercise is because my Democratic colleagues have been telling me they support commonsense legislation for months. Just last November, Ranking Member Waters said:
“‘We need legislative action to ensure that digital asset entities cannot operate in the shadows outside of robust federal oversight and clear rules of the road.’
“She also said, ‘It is clear there are major consequences when cryptocurrency entities operate without robust federal oversight and protections for customers.’
“Or my subcommittee Ranking Member Lynch, who said, ‘While FTX may be headquartered offshore, the circumstances surrounding its collapse strongly point to the need for developing thoughtful regulation to protect U.S. investors.’
“That’s a great point – since we can’t trust offshore crypto exchanges like we saw with FTX, we want to work on legislation to have more US-based companies that will follow the rules, protect American investors and consumers, and prevent an FTX from happening again.
“However, if we fail to provide a functional framework for digital assets in this country, all we’re doing is forcing this activity to happen on offshore exchanges, rather than in a regulated US environment—and this will hurt American investors more than anything.
“Remember, this Committee worked in a non-partisan way to have Sam Bankman-Fried testify last December before he was arrested in the Bahamas. It wasn’t our decision to cancel his appearance.
“But the bankruptcy process will take a long time and SBF’s criminal trial in October could even be delayed. As long as FTX remains an ongoing issue for the Committee, I want to reiterate my commitment to work with the Minority.
“However, we can’t lose sight of why both Democrats and Republicans have been calling for legislation for months.
“There’s nothing partisan about, to quote Senator Gillibrand, ‘[establishing] a regulatory framework that spurs innovation, develops clear standards, defines appropriate jurisdictional boundaries and protects consumers.’
“That’s why we’re here today. No one here is claiming that crypto should be exempt from the rules or that we should create an entirely new regime for it.
“Instead, we’re trying to apply the principle of ‘same risk, same regulation’ to amend current law to establish the functional regulation of digital assets, where market participants are brought into the regulatory perimeter in a way consistent with longstanding investor protections that are tailored to the unique risks and benefits of the digital asset ecosystem.
“Both the SEC and CFTC have an important role to play as do both of our committees, and today represents our commitment to that work. We hope the agencies will work with us and support our committees’ commonsense approach for digital asset legislation.
“We have the same goal: to bring consumer protections seen in the current financial regulatory structure to digital asset-related activities and intermediaries.
“Thank you to our accomplished panel of witnesses for being with us today.
“We very much look forward to your testimony.”
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