Following the May Liberation of the Clarity Act, the bill on the structure of the representative’s chamber market to establish a regulatory framework of cryptocurrency, the Senate banks committee met with industry chiefs on Wednesday to discuss how the Senate would develop its own framework.
Here are six take -out dishes the hearing.
America is late in establishing a cryptographic regulatory framework.
Countries like the United Kingdom, Japan and Singapore implement tailor-made digital asset executives, as the United States has been late, said Summer Mersinger, CEO of the Blockchain Association.
“(W) e must consider the establishment of a federal regulatory framework as a national priority,” said Mersinger. “Digital assets and blockchain technology revolutionize financial services, supply chains and digital identity. The country that leads to this policy will establish global standards and unlock enormous economic and strategic advantages. The United States should be this leader, and this is our time to lead. ”
The existing laws adapted to traditional finance do not quite correspond to the crypto.
Mersinger noted that the regulation of the industry with the laws already in place has “created an ambiguity”, thus limiting innovation and pushing changemakers to other jurisdictions with clearer crypto rules.
She also noted that traditional banking regulations are not adapted to digital assets or blockchain, because they are intended for centralized intermediaries – “And that’s not what we are dealing with here.”
“Without rules in a thoughtful way for the road, we may suffocate innovation, to leave American consumers without guarantees and appropriate protections, and to cede leadership in a sector that will define the future of global finance and technology,” she said.
The great debate continues: security or goods?
In his declaration of opening, the chairman of the Tim Scott committee, R-SC, said that the Senate Republicans recognize “the need to clarify and clearly define what is a commodity and what is security and how digital assets can exchange and be kept in a way that promotes innovation while protecting investors”.
Mersinger said that regulators should recognize that digital assets are not titles.
“The code is not security,” she said.
Timothy Massad, former president of the CFTC and former assistant secretary of the Treasury department, suggested that the discussion is wider than that.
“This is a technology. It is not an asset class. It will be used in many ways, including in tokenization titles,” said Massad.
“Whether something in digital form is security, merchandise or neither can be easily defined by one or two paragraphs in a status,” he said. “It depends on what the token represents, if there is a transmitter, if the transaction is that in which capital is lifted, and so on.”
In addition, technology and its use cases are evolving rapidly, “we must therefore not lock the definitions that will prove obsolete soon,” he said.
Illicit activity and fraud are a concern, But to what extent varies according to the source.
The Americans lost more than $ 9 billion against cryptographic scams last year, up 66% compared to the previous year, according to the Federal Bureau of Investigation Statistics quoted by Senator Elizabeth Warren, Committee classification member.
In addition, “terrorist organizations have demonstrated increased sophistication in their use of cryptocurrency, transforming towards wallets, mixers and pieces of confidentiality without a ditch like Monero”, according to TRM Labs, which Warren also quoted.
But “the data show that a more illegal activity always occurs with money than with crypto”, according to Scott, potentially referring 2024 Treasury data This revealed that “the use of virtual assets for money laundering remains well below that of fiduciary currency”.
“Criminals largely use silver laundering strategies based on cash because species offer anonymity. They generally use the American currency because of its broad acceptance and stability, “reported the treasure.
According to the co-founder and CEO of Chainalysis, Jonathan Levin, the blockchain improves the capacity to act quickly against illegal access. “Following money on the blockchain is actually easier than in traditional finance.”
“Tokenized asset transmitters can actually take measures to freeze and easily grasp the assets,” he added. “In a recent pig butcher’s shop, Crypto Exchange OKX and the stablecoin Tether issuer frozen, then took $ 225 million in criminal products in collaboration with American secret services. The traceability and programmability of these assets are a key advantage to fight against illegal activity. ”
Chainalysis works with banks, fintechs and public agencies to mitigate fraud, and has found that less than 1% of cryptographic transactions are linked to illegal activity, which puts it equally with traditional finances, said Levin.
Elected officials with close links with the crypto are not kosher, believe some people. But it is not illegal either.
Warren personally called President Donald Trump for his countless transactions in the cryptography industry, in particular by issuing his own same, having a wallet of cryptographic investments and (for his sons) with a Bitcoin extraction company.
According to Chainalysis, Trump and his associates made more than $ 320 million on the $ Trump Memecoin expenses, cited Warren.
“If Congress adopts a bill creating a new federal regulatory framework for the cryptography market, what will happen to the cryptography market? Is it likely to grow? ” Warren asked Richard Painter, a former chief lawyer for the ethics of the White House.
“This will develop considerably,” he said.
“And what will it do at the same value of President Trump?” Warren asked.
“It will make him very rich, even richer than it is already,” said Painter.
Painter also targeted legislators by reflecting on cryptography legislation after receiving heavy donations from campaign from cryptographic societies. He had recently tweeted That Senator Kirsten Gillibrand, D-NY, who co-pacarraine the stablecoin legislation which preceded the law on genius, had received $ 217,000 of campaign donations from cryptographic societies.
The president having a disproportionate role in digital assets and members of the congress receiving contributions to the cryptography industry campaign and the vote on the bill will lead “a lack of confidence in our regulatory system,” said Painter.
And if the legislators do not obtain the framework of the market structure, right?
Senator Lisa Blunt Rochester, in, questioned the painter on the risks of the congress moving too quickly on cryptographic legislation without a clear understanding of the consequences on the market.
“The risk is that we repeat the experience of regulating banks in the 1920s and the depression that followed, 10 years of depression,” said Painter. “The risk is that we repeat what happened in 2008 when the contributions of the campaign flocked to the Congress of the Tracking Tracks exchanges, elsewhere in the financial services sector, and we have had decades of deregulation, the economy collapsed, millions of American families losing their homes, unemployed people.”
“We do not want another economic collapse caused by the deregulation of the financial services sector,” he said.
