On Feb. 6, House Financial Services and Agriculture Committee leaders sent a letter to Treasury Secretary Janet Yellen regarding the lack of regulation in the spot market for digital assets that are not securities.
The letter was sent from Patrick McHenry, Glenn Thompson, French Hill, and Dusty Johnson, all chairmen of various House committees.
They requested that Janet Yellen, in her capacity as Chair of the Financial Stability Oversight Council (FSOC), provide answers to calls to “fill existing regulatory gaps in the spot market for digital assets.”
Moreover, the House Financial Services Committee held a hearing with Janet Yellen on the FSOC’s annual report on Feb. 6.
CFTC Oversight on Non-Securities
The letter follows calls from the FSOC and Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam to fill regulatory gaps in the crypto market.
“Despite identifying these gaps, regulators have failed to facilitate an environment that ensures consumer protection and fosters digital asset innovation in the United States.”
They argue that proposed legislation already exists granting the correct agency jurisdiction over non-security assets.
The bipartisan Financial Innovation and Technology Act for the 21st Century (FIT21) would provide the CFTC with jurisdiction over digital asset spot markets.
The bill would also impose robust customer protections on entities registered with the SEC and CFTC.
“The need for federal legislation over cash market digital assets has never been more critical, and I will continue my call for action,” said Behnam last month.
The letter concluded that it has been more than a year since the crypto collapses and contagions of 2022, yet the U.S. is still without robust regulations.
“Over a year after the collapse of several digital asset firms and the associated customer losses, digital asset firms continue to operate despite the ongoing gaps in federal oversight.”
Republicans are bringing much-needed accountability to Secretary Yellen’s FSOC for its failure to fulfill its statutory mission of identifying and responding to emerging risks in pursuit of progressive priorities, read a press release on Patrick McHenry’s opening remarks at the meeting.
The Biden Administration has procrastinated over regulating digital assets, which has resulted in an exodus of talent and innovation.
Meanwhile, agencies such as the SEC have taken it upon themselves to fire out lawsuits left, right, and center targeting crypto companies for failure to comply with laws that don’t apply to them.