U.S. House Committee Proposes New Crypto Legislation With One Key Distinction

On Tuesday morning, the U.S. House Financial Services Committee will be holding a hearing on the Securities and Exchange Commission’s supervision of digital assets. While most hearings turn out to be indecisive and mundane, this in particular might just turn out to be a pretty significant one for the larger crypto market.

House Committee Calls Out Regulators

While speaking in an interview with a leading media outlet —  Patrick McHenry — Chairman of U.S. House Committee on Financial Services, claimed that the financial regulators failed in putting forward a compelling yet robust regulatory framework for crypto businesses to operate. Due to the lack of clear guidelines and rampant crackdowns in the country, several crypto firms have been subjected to relocate their operations off-shore. Coinbase CEO’s latest statement on possible relocation sent shockwaves throughout the market earlier today.

Read More: Gary Gensler “Failed To Explain How Crypto Firms Should Comply”

In addition, McHenry clarified that the House Committee was looking forward to proposing a new crypto regulation that would explicitly establish the nature of cryptocurrencies and would finally put an end to the ongoing debate between commodities and securities. The North Carolina Representative was quoted as saying:

The legislation will provide a distinction between what is a commodity and a security in the digital realm and digital and the digital asset ecosystem.

SEC Chief Grilled Over Crypto Crackdowns

As the hearing is underway at the time of writing, the Republicans on the House Financial Services Committee have criticized the agency’s chair, Gary Gensler, calling his approach to crypto firms not “compatible” with the law as it currently stands.

Gensler has stated on multiple occasions that he is certain his agency possesses the jurisdiction it requires in order to supervise cryptocurrency, and he has advocated that all cryptocurrency exchanges must comply with the regulator. More recently, enforcement measures taken against companies such as Beaxy and Bittrex imply that he considers exchanges to register as a “national securities exchange, broker, and clearinghouse”.

On the other side, a group of representatives, including the Vice-Chairman of the House Financial Services Committee and Chairman of the Financial Services Subcommittee on Digital Assets sent a letter to SEC Chair Gary Gensler regarding his regulatory inconsistency in his treatment of spot bitcoin exchange-traded products (ETP) applications.

Also Read: Critical Vulnerabilities in iOS and macOS Risks Crypto Assets Loss