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Today, the U.S. Senate Banking\u2019s Subcommittee on Digital Assets hosted a hearing entitled\u00a0 \u201cExploring Bipartisan Legislative Framework for Digital Assets Market Structure\u201d in which the panelists implored Congress to pass digital asset legislation soon.<\/p>\n
(Spoiler alert:<\/em> The word \u201cBitcoin\u201d didn\u2019t come up once in the hearing. With that said, Bitcoin would be subject to some of the crypto regulation discussed in the hearing. Hence, it\u2019s important as a Bitcoin enthusiast to understand what was said.)<\/p>\n The hearing took place in the wake of Senators Cynthia Lummis (R-WY), Thom Tillis (R-NC), Bill Hagerty (R-TN) and Senate Banking Chairman Tim Scott (R-SC) issuing principles for digital asset market structure<\/a> this morning. (See the full list of principles here<\/a>.)<\/p>\n Senator Lummis presided over the event and initiated it by touching on some of the aforementioned principles, while also facetiously adding that now that the Senate has voted on the GENIUS Act<\/a>, the U.S. is in the process of joining the 21st century financially.<\/p>\n The senator was joined by Senators Bill Hagerty (R-TN), Bernie Moreno (R-OH), Angela Alsobrooks (D-MD), Dave McCormack (R-PA), and the panel of witnesses including:<\/p>\n In the first round of questions from Senator Lummis, both Behnam and Hammer stressed the importance of combatting illicit activity involving digital assets via clear anti-money laundering<\/a> and anti-terrorist financing rules, though neither went into detail on what this might look like.<\/p>\n When Senator Lummis asked Hammer what country the U.S. should take note of when it comes to its anti-terrorist financing regulation for crypto, Hammer cited Singapore<\/a>.<\/p>\n Before getting off of the topic of combatting illicit crypto activity, Behnam claimed that the longer Congress waits to pass comprehensive market structure legislation, the more space it gives to unsavory actors to operate.<\/p>\n \u201cBad actors will gravitate toward areas that are unregulated,\u201d said Behnam.<\/p>\n Senator Hagerty, the primary sponsor of the GENIUS Act, which recently passed in the Senate, praised the bipartisan efforts in the legislative process around digital assets, alluding to the notion that he\u2019d like to see his colleagues keep up the momentum.<\/p>\n And on the topic of bipartisanship, the one Democratic senator present at the hearing, Senator Alsobrooks, seemed optimistic about the potential of crypto but also concerned about setting up the proper guardrails for investors.<\/p>\n She asked Behnam which of consumer protection elements were essential for crypto investors.<\/p>\n Behnam cited \u201cbankruptcy protection\u201d as the most important element of consumer protection.<\/p>\n \u201cCustomer assets must be fully segregated so that there\u2019s no question in the event of a bankruptcy that assets will be returned to customers,\u201d said Behnam.<\/p>\n Toward the latter part of the hearing, Senator Moreno asked the panelists how much time the U.S. has to pass crypto regulation as well as what the price of failing to do so might be.<\/p>\n Xethalis responded by saying \u201cwe have to act now,\u201d before sharing what he felt were the two biggest potential costs of the U.S. not acting soon are.<\/p>\n He claimed that the first cost is that other jurisdictions may enact more onerous rules for crypto, which could cause friction if adopted globally. He cited Europe\u2019s enacting strict rules for internet commerce decades back as precedent for this.<\/p>\n Xethalis then argued that the second cost is economic. He said that the United States is behind in both 5G development and silicon chip manufacturing and stressed that he doesn\u2019t want to see the same happen with crypto.<\/p>\n Senator Lummis closed the hearing by imploring her fellow senators as well as the panelists to engage in bipartisan discussions and to work across the aisle, as she has done with Senator Gillibrand<\/a>.<\/p>\n She noted that it seems that some Democrats have been reluctant to engage in the legislative process around crypto because President Trump\u2019s family is involved in the industry, adding that crypto is bigger than the president\u2019s family\u2019s involvement and that Democrats should acknowledge this.<\/p>\n<\/div>\n\n
Combatting Illicit Activity in the Crypto Space<\/h2>\n
Consumer Protection for Crypto Investors<\/h2>\n
The Price of Failing to Legislate on Crypto in the U.S.<\/h2>\n
A Call for Bipartisanship<\/h2>\n