While the U.S. House Financial Services Committee continues deliberating a crypto bill that would overhaul current regulations for industry, a handful of interest groups made it clear in a scathing letter that they oppose the current draft.
Twenty one organizations signed the letter, including the American Economic Liberties Project, the Revolving Door Project, and the Center for American Progress. The letter begins by talking about the trillions lost in the 2022 “crypto collapse”and the billions funneled away in scams and fraud.
“After 14 years, crypto still struggles to demonstrate viable use cases outside of speculative investment,” reads the letter. It continues: “While other tech has proven its usefulness many times over, crypto's big moment is always just over the horizon.”
The signers say the current Digital Asset Market Structure Discussion draft—one of the latest crypto bills that’s gathered support from the crypto industry—is “potentially radical,” and would weaken investor protection. It points to eight crucial problems, including underfunding but overloading the CFTC, leaving it with a vague mandate, and weaker regulatory requirements for crypto asset issuers.
The Financial Services Committee is somewhat split on crypto regulations. Rep. Patrick McHenry (R-NC), the chairman of the committee, is a key supporter of the bill, whereas Rep. Maxine Waters (D-CA), the committee 's ranking member, is against it. She’s not alone. Long-time crypto opponent Rep. Brad Sherman (D-CA) has also spoken out against it.
The most damaging aspect of the bill, according to the group of signers, is the alleged rewrite of the U.S. Securities and Exchange Commission mandate and mission, which would look to incorporate new rules surrounding innovation. The SEC’s current legal framework dates from the 1930s, a fact that many in the crypto industry have said is a sign that it is outdated and needs reviewing.
Among other of the crucial concerns are the idea that the bill would create a blueprint for unregistered stock offerings. The letter’s signatories alleged the proposed legislation would create a roadmap for traditional finance firms to use “decentralized networks” to evade oversight, and expand a temporary “safe harbor” that could tacitly reward non-compliance.
Despite the current bill which is currently mid-discussion, the United States faces a fervent battle internally with regards to digital currencies.
U.S. Senator Elizabeth Warren is busy creating a “Anti-Crypto Army,” and the SEC has been at the forefront of intense regulatory scrutiny. Meanwhile, Rep. Senator Cynthia Lummis continues pushing to remedy crypto’s “erratic regulatory framework,” along with several presidential hopefuls who are explicitly in favor of Bitcoin and other digital assets.
The group concluded that Congress should stop pursuing the “ill-advised proposal,” and instead protect consumers who choose to participate in crypto markets.