Rep. Maxine Waters (D-Calif.), ranking member of the House Financial Services Committee, has solicited viewpoints analysis and recommendations in letters sent to the Department of Treasury and the Securities and Exchange Commission (SEC), regarding a discussion draft of cryptocurrency legislative framework.
Introduced on June 2, the discussion draft would impact the jurisdiction of the Commodity Futures Trade Commission (CFTC) over digital commodities and the SEC’s authority over digital assets. Committee Chairman Patrick McHenry (R-N.C.) is a co-author of the discussion draft and also the primary sponsor of newly proposed bills regarding financial statement requirements of emerging growth companies that if passed, will indirectly impact regulators’ oversight in the crypto space.
In committee hearings on digital asset oversight and securities laws, Waters expressed concern over the Republican-led legislative proposal.
“I am particularly worried that the Republican bill would allow crypto firms that are currently being sued for violating our securities laws to continue doing business through provisional registration,” Waters said. “We witnessed last year when disgraced FTX CEO Sam Bankman-Fried defrauded millions of customers, and now the SEC is taking actions against firms like Binance and other firms for potentially similar behavior. The bill appears to halt any enforcement actions by the SEC against crypto firms, even when they have committed fraud. This provisional registration could reward bad actors with a ‘get out jail free’ card and allow them to continue harming consumers and investors.”
In her letters, Waters requested insight from the agencies on how the proposed legislation would impact their ability to conduct oversight of crypto firms. Waters specifically asked the SEC for recommendations on ways to amend existing law, outside of this legislative proposal, to enhance investor protections in the crypto space. In her letter to the Treasury, Waters asked for insight on how the bill would address or conflict with Treasury’s existing policy recommendations, and if the bill, or specific provisions of it, are needed.
“This discussion draft is the first step toward delivering on Republicans’ commitment to develop clear rules of the road for the digital asset ecosystem,” McHenry said in a press release announcing the discussion draft. “Our goal is to strike the appropriate balance between consumer protection and encouraging responsible innovation. This is the product of an unprecedented joint effort between the House Financial Services and Agriculture Committees, which gives us a better shot at striking that balance. I encourage stakeholders and market participants to provide constructive feedback to help us improve our legislation.”