House Financial Services Committee Chairman Patrick McHenry announced today that U.S. Securities and Exchange Commission chairman Gary Gensler would appear before the House’s digital assets subcommittee on Apr 18, 2023.
McHenry Hopes to Discuss “Regulatory Sphere” for Digital Assets with Gensler
“This will be our first oversight hearing of the Securities and Exchange Commission,” McHenry confirmed
The oversight hearing will seek clarity on Gensler’s rulemaking and approach to digital assets.
McHenry said, “In terms of policy, [this will be] a serious approach in terms of us laying down…a regulatory sphere for digital assets.” He hopes to develop this work on this regulatory sphere in the next few months.
McHenry established the digital assets subcommittee in Jan. 2023 to help close a structural gap in the House Financial Services Committee in addressing crypto topics. Rep. French Hill (R-Ark.) leads the subcommittee, with Rep. Warren Davidson (R-Ohio) as his deputy.
At the subcommittee’s inception, McHenry said it would provide federal regulators with rules and extend the reach of financial technology to underserved demographics.
After the recent collapse of Silicon Valley Bank and the depegging of the USDC stablecoin, Rep. Maxine Waters, the highest-ranking Democrat from the House Financial Services Committee, said she and McHenry would fast-track a new stablecoin bill drafted last year.
Waters also recently clarified that she would return a political donation of $2,500 she received from SVB’s political action committee in 2020. McHenry and Senator Mark Warner (D-VA.) received $7,500 over six years from the same PAC.
US Risks Capital Flight Under Severe Regulatory Regime, Says Industry Expert
Gensler’s approach to regulation has frustrated key industry players, including executives at the largest crypto exchange in the world, Coinbase.
Recently, the SEC served the exchange a Wells Notice, alleging that certain assets it listed were securities. The move received pushback from Coinbase CEO Brian Armstrong and Coinbase’s Chief Legal Officer Paul Grewal for the lack of clarity on the assets affected.
The SEC’s crackdown on Coinbase rival Kraken also received criticism from within its own ranks through Commissioner Hester Peirce. Pierce suggested that the exchange provide a standard application process for crypto companies and projects. They should then review each project for unique components and address those case by case. Kraken paid $30 million to settle with the agency and has ceased offering its staking product to U.S. customers.
In a recent interview with BeInCrypto, Alice Nawfal of Notabene, a firm that sells technology to help crypto companies comply with the Financial Action Task Force’s Travel, said of the SEC and Genslers aggressive approach,” It’s hard to impose old rules and new technologies.”
Head of Regulatory Compliance at Notabene, Lana Schwartzman, also chipped in, saying that the U.S. risks capital flight from crypto companies should regulatory hostility in the U.S. continue.
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