American Innovation and the Future of Digital Assets Aligning the U.S. Securities Laws for the Digital Age”
House Subcommittee on Digital Assets, Financial Technology and Inclusion
2025-04-09
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Source: Congress.gov
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Transcript
The Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence will come to order. Without objection, the chair is authorized to declare recess at any time. The hearing is titled American Innovation and the Future of Digital Assets, Aligning the U.S. Securities Law for the Digital Age. Without objection, all members will have five legislative days within which to submit additional material to the chair for inclusion in the record. I'll now recognize myself for four minutes for an opening statement. Good morning and welcome to the first digital assets market structure hearing for this Congress. Last week, we successfully passed the Stable Act out of this committee, marking a significant step forward in advancing the first half of President Trump's digital asset agenda. Today, we will resume our efforts on advancing the second half of the agenda, comprehensive digital asset market structure legislation. Recently, Chairman Hill and House Ag Committee Chairman GT Thompson outlined their vision for digital asset market structure legislation, an op-ed titled, A Blueprint for Digital Assets in America. In that piece, the Chairman emphasized the transformative potential of digital assets and the urgent need for a clear regulatory framework, one that fosters innovation, development, and market structure legislation. The Chairman also outlined six core principles. The United States has been a global leader in financial innovation, balancing market growth with investment protection. However, as digital assets and blockchain technology gain prominence, the Biden-Harris administration's hostile approach drove the digital asset ecosystem to jurisdictions with already established frameworks. Now we have an opportunity to correct course and make the United States the epicenter of this ecosystem. Our goal today is to examine what aspects of the ecosystem are implicated by securities laws and analyze the challenges of applying these laws. Let me be clear, the House Financial Services Committee recognizes that digital assets have use cases beyond financial markets.
At the same time, the committee feels strongly that there's a role for the U.S. Securities and Exchange Commission to play in the digital assets ecosystem. For example, the committee believes that issuers raising capital through the sale of new digital assets should fall under the jurisdiction of the Securities and Exchange Commission. Issuers should be required to disclose relevant information that helps users understand the unique characteristics of the digital asset networks they're investing in. Today, we'll explore how we can modernize our securities law to better accommodate the unique characteristics of digital assets. This includes examining classifications of digital assets, the adequacy of current disclosure requirements, and the applicability of various requirements for intermediaries. It's crucial for this committee to enact legislation that provides clear guidelines for issuers and market participants. facilitates capital formation and maintains the integrity of both the digital asset ecosystem and the traditional finance system. Through this process, we must ensure that American innovators and entrepreneurs can thrive at home. We're fortunate to be joined today by a distinguished panel of esteemed experts in securities laws, digital assets, and financial technology. Their insights will be invaluable as we deliberate on these complex issues and consider how best to address technology and legislation. Thank you for your time and for being with us today, and I look forward to your testimony. The chair now recognizes the ranking member of the subcommittee, Mr. Lynch, for four minutes for an opening statement.
Good morning. Thank you, Mr. Chairman. I want to thank you, and I want to thank our are witnesses for their willingness to help the committee with its work. On the heels of last week's markup hearing, which considered stablecoin legislation, the committee is now quick to move on to fulfilling the crypto industry's next request, addressing the crypto market structure. This hearing includes aligning the U.S. securities laws for the digital age. In its title, I interpret this to mean lowering regulatory standards and removing securities laws that protect consumers and investors, which are viewed as obstacles to the crypto industry. The US has had a long, outstanding history of robust securities laws designed to protect investors, encourage competition, and ensure financial stability. At a time when our country faces high inflation, and President Trump's reckless tariffs send our markets into a tailspin, this committee should be working to preserve market integrity, not grant an industry wish list. Just this week, crypto prices dropped in line with the stock market dips following tariff announcements. Bitcoin's price plummeted to under $77,000, down more than 10% from its high last week. If these speculative products resemble in their activity traditional security products, they should be treated the same way. For the last several years, the crypto industry has launched a campaign against the SEC, claiming it's been unfairly targeted and that it is unable to comply with securities laws. Rather than adjust their practices or acknowledge that their products are do come under the jurisdiction of existing securities laws, the industry has fought to elect and appoint crypto-friendly policymakers. As we speak, crypto firms are fighting amongst themselves to craft legislation that favors their business models and ensures they can maximize their profits. It is also notable that under the Trump administration, the SEC has dropped almost every lawsuit against some of the worst offenders in the crypto industry.
This includes Crypto.com, Ripple, Kraken, Gemini, Finance, Coinbase, Robinhood, and Uniswap. I assume that under the nominated chair, Paul Atkins, who has advised several crypto firms, the SEC will continue in this direction. These are companies that have a proven history of irresponsible, illegal, and predatory practices.
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