Today, the Senatoric Banking Committee has welcomed an audience entitled “From Wall Street to Web3: Building Tomorrow’s Digital Asset Markets” in which American senators on both sides of the alley have signed up with the leaders of the cryptographic industry and the specialists in digital assets (witnesses at the audience) to discuss the structure of the active markets digital.
The key themes of the hearing included the role of crypto in illicit finance, the conflict of interest associated with the involvement of the Trump family in the cryptography industry and regulatory competence.
The President of the Senate Bank, Tim Scott (R-SC), presided over the hearing alongside the member of the Elizabeth Warren (D-MA) classification. They were joined by more than half a dozen other senators and six witnesses for a session of two and a half hours.
Witnesses included:
- Summer Mersinger, CEO of the Blockchain Association
- Jonathan Levin, CEO of Chainalysis
- Dan Robinson, general partner at Paradigm
- Brad Garlinghouse, CEO of Ripple
- Timothy Massad, researcher at the Kennedy School of Government of Harvard University and the former president of Commodities and Futures Trading Commission (CFTC)
- Richard W. Painter, former chief lawyer for the ethics of the White House
Crypto and illicit finance
In the opening remarks of Senator Scott, he noted that “more illegal activities occur with money rather than crypto”.
The member of the Senatoric Banking Committee, the member of the ranking, the senator Elizabeth Warren (D-MA), provided an opposite opinion in her opening remarks, because she said that, as the total market capitalization of Crypto has increased, the same is true for illegal activity on the blockchain. The senator then cited how North Koreans hacked billions of dollars in cryptographic assets, creating a threat to American national security in the process.
Levin provided a certain context, however, because he noted that “illicit activity is less than 1% of the overall activity that occurs on blockchains”, while adding that this number is higher in traditional markets.
“The majority of the activity on blockchains is a legitimate activity,” he added.
That said, Levin noted that cryptographic mixers make the chain analyze that work in the surveillance of public blockchains for criminal activity is more difficult, but also noted that the chainysyssis “saw less to use cryptographic mixers in the terrorist funding than you plan”.
The Trump family conflict of interests with the crypto
Senators Raphael Warnock (D-GA), Chris Van Hollen (D-MD) and Warren all mentioned what they called the “conflict of interest” of President Trump to plead for cryptographic legislation while he and his family are actively involved in the cryptographic industry.
In the opening remarks of Senator Warren, she noted that “$ 7 billion in the richness of President Trump are now in crypto”, while Senator Warnock has questioned the ethics of President Trump having published a piece of memes.
Senator Van Hollen detailed the scenario in which Eric Trump met an investment company in the United Arab Emirates (water) concerning a stablecoin that his company, World Liberty Financial, published before his father’s visit to the country (the company ended up investing $ 2 billion in the project). The senator then noted that certain cryptographic legislation would benefit from World Liberty Financial.
Painter, who has argued earlier in the session that “we cannot have the people who are responsible for adopting and applying (crypto) legislation have conflicts of interest … This includes the president,” said that we are currently witnessing one of the greatest ethical financial violations by a president in office in the past 100 years.
Regulatory jurisdiction: division authority between the CFTC and the dry
Throughout the audience, Massad argued that the American Commission for Securities and Exchange (SEC) and the CFTC should work together to regulate the digital asset industry.
“The solution is not that the congress becomes the regulator,” said Massad. “It’s for the dry and the CFTC to work together.”
Massad added that “the industry took advantage of the gap between the dry and the CFTC”.
Mersinger also noted that she would like to see a collaboration between the two agencies, although she said she would like to see that the CFTC had more power in the cryptographic markets, because the agency adopts a more based on principles “, which, according to Mersinger, is” better for industry “.
Massad commented on the importance of adopting such an approach, because it said that “Congress should think in terms of principles, not detailed rules, because these (rules) can become obsolete quickly.”
Senator Katie Britt (R-AL) also spoke in favor of an approach based on principles.
“We must have a regulatory regime based on principles and prevent restrictive regulations around this industry,” she said.
(Neither Mersinc nor Massad nor the Senator Britt provided color about what these principles might look like.)
Bippartite legislative efforts
Halfway through the audience, Senator Bernie Moreno (R-OH) said that crypto is more a “generational question” than it is a republican problem of democrat.
And Senator Scott praised the Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY) for the legislation they wrote together, from 2022, alluding to the idea that the two senators established a standard for what the sensitive Bipartisan cryptographic legislation should look like.
In the remarks of Senator Lummis at the end of the hearing, she thanked Senator Gillibrand for working with her to develop legislation that “protects consumers, but which also works for innovators”.
The senator also thanked his democratic colleagues for their diligence by working with the Republicans to propose legislation, starting with the law on engineering, before ending with a presentation monologue on Bitcoin and the Cyphenpunks, Bitcoin offspring and digital assets.
“You look at the Internet and the cypherpunks of the 80s and 90s which created code and used cryptography and the government was afraid of it, so that the NSA called (cryptography) a weapon and classified it as something that should not be available for the general public,” said Senator Lummis.
“But our courts in this country have decided that cryptography and code writing are protected freedom of expression under the first amendment – and that has changed the situation.
“So, now we at the point where from 2009 (to) where we are teday, we have a mature industry that is asking us to provide clear rules of the road… We’re in the right place at the right time to help these innovators to take their right place in the global economy (and) Our country, that is important to individual freedom, that is important to the unbanked and underbanked, and that will make the appropriate the opportunity to grow (wealth) – as opposed to our dollar, which is, by design, to decrease in value.
