At his inaugural hearing as chair of the House Agriculture Commodity Exchanges, Energy, and Credit Subcommittee, Rep. Sean Patrick Maloney, D-N.Y., said, “Providing congressional direction to establish the rules of the road to ensure American retail investors are informed and protected is as important as ever.”
“While the CFTC [Commodity Futures Trading Commission] has dutifully exercised its role as a regulator and enforcement authority in digital asset markets, its authority is limited,” Maloney said.
“When you couple the recent volatility with high retail participation in digital asset spot markets, it is concerning that there is a gap in oversight and regulation of these markets.
“The growth of the digital asset industry has centered on innovation, transparency, and security — and I believe in fostering that innovation here in the United States.
“In contrast to a traditional bank or financial institution, the most popular cryptocurrencies, bitcoin and ether, have entirely public ledgers. Anyone can view them and participate in recording and authenticating transactions on them.”
Maloney also said “the digital asset economy presents opportunities to support financial inclusion, but, without strong customer protections and regulatory certainty, participants in the industry may be at increased risk of financial loss and exposure to fraud.”
Rep. Michelle Fischbach, R-Minn., the ranking member on the subcommittee, noted that Rep. Glenn “GT” Thompson, the ranking member on the House Agriculture Committee, and Rep. Ro Khanna, D-Calif., had introduced the bipartisan Digital Commodity Exchange Act of 2022, which she said “would give the CFTC expanded oversight of the trading of those digital assets which are commodities.”
“And it would bring certainty to market participants by doing what the regulators cannot — providing legal clarity to market intermediaries and participants,” Fischbach said.
Fischbach said she appreciates the efforts the CFTC and the Securities and Exchange Commission “have made to try to fold digital assets into the existing framework, but in some cases — particularly for spot digital commodity transactions — the existing law simply lacks the authorities necessary. As the popularity of digital assets continues to grow, it is incumbent on Congress to speak clearly about how best to regulate.
“I’m glad we have the opportunity to explore these issues and the way Congress can better create an environment where digital assets can become not only a valuable financial product, but an important conduit of innovation in our financial system.”