Republican lawmakers sent a letter to Treasury Secretary Janet Yellen demanding answers about how her Financial Stability Oversight Council determines how cryptocurrencies should be defined at the federal level.
Lawmakers asked Yellen about collaboration between the Securities and Exchange Commission and the Commodity Futures Trading Commission. CFTC Chairman Rostin Behnum and SEC Chairman Gary Gensler are members of the FSOC, which is tasked with overseeing the stability of the financial system.
According to its 2022 report, the FSOC noted regulatory gaps that exist in the spot market for digital assets. reportand recommended the passage of a bill that would give financial regulators rule-making powers for the spot market.
”“Despite identifying these gaps, regulators have failed to ensure consumer protection and foster an environment conducive to innovation in digital assets in the United States,” the lawmakers said in a statement Tuesday.
House Financial Services Committee Chairman Patrick McHenry (North Carolina), House Agriculture Committee Chairman Glenn “GT” Thompson (Pennsylvania), Representative French Hill (Arkansas), and Representative Dusty Johnson. Congressman (South Dakota) signed the letter.
They asked Yellen for the FSOC's view on how securities laws apply to “crypto-asset issuers,” citing a court case from last year involving Ripple Labs and the SEC.new york judge control In July, a court ruled that some of Ripple's sales of XRP did not violate securities laws because a blind bidding process was in place, but other direct sales of the token to institutional investors did not. was held to be a security.
Lawmakers also asked whether the FSOC considers that both Bitcoin and Ether are not securities, and whether it is appropriate to extend the CFTC's jurisdiction to the spot market. They are asking for a response by February 20th.
The four co-signers are also leading efforts on a bill called the Financial Innovation and Technology for the 21st Century Act. This bill takes a comprehensive approach to the regulation of virtual currencies. Essentially, it adds new value to the CFTC. authorities Although it has not yet gained the necessary support in the cash market, some people say: invoice It is a “big virtual currency wish list”. Lawmakers said Tuesday that the bill fills the gaps cited by FSOC.
Yellen attends Capitol Hill
Yellen testified before the House Financial Services Committee on Tuesday, renewing her call for Congress to pass legislation regulating the spot market for stablecoins and crypto assets that are not securities.
“There are many areas where we have clear regulatory authority when it comes to digital assets, but it is imperative that Congress takes steps to fill it to protect consumer investors and address financial stability risks. “We've identified some gaps that would be beneficial to those gaps,” Yellen said.
Yellen said this is a regulatory gap because the CFTC does not have regulatory authority over the spot market.
The Treasury Secretary then focused on stablecoins, stating that they pose risks to the financial system.
“I very much welcome Congress' efforts to create the appropriate regulatory framework to address these risks,” Yellen said.
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