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US House of Financial Services Committee to hold a hearing with top Crypto Industry CEOs

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The US House of Financial Services Committee is having a hearing on the topic of “Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the United States” with 6 leading cryptocurrency and blockchain companies to appear before Congress. Three of the companies in this crypto hearing are part of the Blockchain Association.

What the Crypto Hearing is About

The purpose of the hearing is to give these leaders an industry analysis regarding aspects the Committee will like to explore which are laid out in the memo shared by the United States House of Representatives Committee on Financial Services. (https://docs.house.gov/meetings/BA/BA00/20211208/114305/HHRG-117-BA00-20211208-SD002.pdf).

This hearing will have one panel with the following witnesses: 

  • Jeremy Allaire, Co-Founder, Chairman and CEO, Circle 
  • Samuel Bankman-Fried, Founder and CEO, FTX 
  • Brian P. Brooks, CEO, Bitfury Group, (ex-banking regulator under Trump administration) 
  • Charles Cascarilla, CEO and co-Founder, Paxos Trust Company 
  • Denelle Dixon, CEO and Executive Director, Stellar Development Foundation 
  • Alesia Jeanne Haas, CEO, Coinbase Inc. and CFO, Coinbase Global Inc.

Areas of focus that have been pointed out in the memo include an overview of the Cryptocurrency Industry and the shift from being an overly Bitcoin dominated asset class to a whole plethora of new digital assets and technology gaining market share including ETH, Stablecoins, non-fungible tokens (NFTs), decentralized finance platforms (DeFi) and the focus on regulations to ensure investor protection, ensure consumer protections and maintain market integrity, given the asset class growth and evolution preceding these past years.

SEC sees Problems with Regulation of Cryptocurrencies

Cryptocurrency Market Exchange Participants have been highlighted as one main talking point as the SEC believes “some exchanges have unilaterally determined that they are not subject to the same regulatory regime, leading to policy debates on market integrity, investor protection, and innovation”. According to the memo provided by Congress, “Cryptocurrency exchanges have garnered scrutiny from regulators domestically and abroad over their rapid growth, as well as the complex and risky products they offer. Coinbase, one of the largest cryptocurrency market exchanges by market capitalization, became a publicly-traded company on April 14, 2021. Coinbase is also affiliated with USD Coin, the second-largest stablecoin, issued by Circle. Other large cryptocurrency exchanges with millions of users include Binance, FTX, and Kraken. FTX US recently acquired LedgerX, an entity registered with the Commodities Futures Trading Commission (CFTC) and is a designated contract market (DCM), derivatives clearing organization (DCO), and swap execution facility (SEF), which enables FTX to offer crypto futures, swaps, and options.” 

Decentralized Finance is also a point of concern as they are considered a means to “replicate and replace conventional delivery of financial services such as loans, asset trading, insurance, and other services, but without central financial intermediaries such as brokerages, exchanges, transfer agents, or banks.

Stablecoins as a Main Concern

Stablecoin products and services are considered to be one of the main points of concern as the study cite the issues with the reserves that sustain these asset classes and the previous audits and studies performed on Tether, the biggest stablecoin issuer back in May 2021 where it was found “that stablecoins issued by Tether, the largest stablecoin issuer, were not fully backed at all times, raising investor-protection concerns.” Criminal and terrorist activity, looser anti-money laundering compliance, and the pseudonymity provided by certain cryptocurrencies were also cited as sources of concern. 

As a final topic, Federal Regulatory Responses to the Rise of Cryptocurrencies was highlighted where the possibility of Central Bank Digital Currencies (CBDCs) was being studied in May 2021, Market Regulation from SEC and CFTC were mentioned, and general concerns regarding the lack of a regulatory framework for cryptocurrency exchanges.  

This is the first time major major participants of the crypto markets will testify before lawmakers regarding the regulation of this new financial asset class.

Sources:

Cryptocurrencies
Cryptocurrencies© Cryptoticker

The post US House of Financial Services Committee to hold a hearing with top Crypto Industry CEOs appeared first on CryptoTicker.

US House of Financial Services Committee to hold a hearing with top Crypto Industry CEOs  
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