Republican lawmakers sent a letter to US Treasury Secretary Janet Yellen seeking answers on how the Financial Stability Oversight Council she leads will ensure how cryptocurrencies are defined at the federal level.
Lawmakers asked Yellen about coordination between the Securities and Exchange Commission and the Commodity Futures Trading Commission. CFTC Chairman Rustin Behnam and Securities and Exchange Commission (SEC) Chairman Gary Gensler are members of the Financial Stability Oversight Committee (FSOC), which is charged with monitoring the stability of the financial system.
The Financial Stability Oversight Committee (FSOC) has identified current regulatory gaps in the spot market for digital assets, according to a 2022 report. a reportAnd agreeing to pass legislation that would give rule-setting authority to financial regulatory bodies in the spot market.
“Despite identifying these loopholes, regulators have failed to facilitate an environment that ensures consumer protections and promotes digital asset innovation in the United States, the lawmakers said in a statement on Tuesday.
The letter was signed by House Financial Services Committee Chairman Patrick McHenry of North Carolina, House Agriculture Committee Chairman Glenn “JT” Thompson of Pennsylvania, Representative French Hill of Arkansas, and Representative Dusty Johnson of South Dakota.
They asked Yellen about the FSOC's views on how securities laws should apply to “issuers of crypto assets,” citing the court case last year involving Ripple Labs and the SEC. New York judge to rule In July, it ruled that some of Ripple's sales of XRP did not violate securities laws due to the blind bidding process in place for them, while ruling that other direct sales of the token to institutional investors were in fact securities.
The lawmakers also questioned whether the Financial Transactions Oversight Commission (FSOC) believes that both bitcoin and ether are not securities, and whether expanding the scope of the CFTC's authority to include the spot market would be appropriate. They said they wanted to respond by February 20.
The four signatories are also leading an effort for a bill called the 21st Century Financial Innovation and Technology Act, which takes a comprehensive approach to regulating cryptocurrencies and would work to… Essentially giving the new CFTC authorities On the cash market, although they have not yet received the required support, some say invoice It's a “big cryptocurrency wish list.” Lawmakers said on Tuesday that the bill would close the gaps mentioned by the Financial Stability Oversight Council.
Yellen on Capitol Hill
Yellen testified before the House Financial Services Committee on Tuesday, once again calling on Congress to pass legislation to regulate stablecoins and the spot market for crypto assets that are not securities.
“There are many areas with respect to digital assets where we have clear regulatory authority, but we have identified some gaps where, in order to protect consumer investors and address financial stability risks, it would be very helpful for Congress to take action to fill those gaps,” Yellen said.
The CFTC does not have regulatory authority over spot markets, so this is a regulatory gap, Yellen said.
The Treasury Secretary then focused on stablecoins and said they pose risks to the financial system.
“We very much welcome Congress’s efforts to create an appropriate regulatory framework to address these risks,” Yellen said.
Disclaimer: The Block is an independent media outlet that provides news, research and data. As of November 2023, Foresight Ventures is the majority investor in The Block. Foresight Ventures is investing in other companies in the cryptocurrency space. Cryptocurrency exchange Bitget is a core program of Foresight Ventures. The Block continues to work independently to provide objective, influential and timely information about the cryptocurrency industry. Below are our current financial disclosures.
© 2023 The Block. All rights reserved. This article is provided for informational purposes only. It is not provided or intended to be used as legal, tax, investment, financial or other advice.
