Rep. McHenry announces hearings to address market structure around crypto

Representative Patrick McHenry suggested the hearings will look to add to the regulatory efforts being done on the bipartisan bill led by Senators Cynthia Lummis and Kirsten Gillibrand.

Representative Patrick McHenry, the House Financial Services Committee chairman, has announced a series of joint hearings in May focusing on addressing the market structure around digital assets in the United States.

The move was revealed in a joint announcement on April 27 from McHenry and Representative Glenn Thompson, chairman of the House Agriculture Committee; Representative French Hill, chairman of the Digital Assets, Financial Technology and Inclusion Subcommittee; and Dusty Johnson, chairman of the Commodity Markets, Digital Assets, and Rural Development Subcommittee.

“Our Committees are embarking on an unprecedented joint effort to pass and sign into law clear rules of the road for the digital asset ecosystem. We must strike the appropriate balance to protect consumers without stifling responsible innovation,” the joint statement reads.

Speaking as part of a panel alongside crypto-friendly Senator Cynthia Lummis during the Consensus 2023 event on April 28, McHenry added more context to the upcoming hearings:

“We’re going to hold joint hearings when we return in May. This is going to be the first time we have had a holistic view for a House committee hearing around the regulation, our market structure around digital assets, and a holistic view of it.”

“What we plan to do over the next two months is report a bill out that deals with the capital raising piece for digital assets, all the way through to how a product can go from a securities regime to commodities regime and also at the same time, preserve our rights around products that are neither neatly [put] into a securities regime or commodities regime,” he added.

McHenry also stressed that the hearings aim to establish a bill providing regulatory clarity to the crypto sector, which adds to the work on a bipartisan bill led by Lummis and Senator Kirsten Gillibrand.

@PatrickMcHenry said U.S. House Will Have Crypto Bill in 2 Months. pic.twitter.com/e06Sx9ec2H

— John Montague (“The ETH Lawyer”) (@0xethlaw) April 28, 2023

The Responsible Financial Innovation Act, also known as the Lummis-Gillibrand bill, was initially introduced in the U.S. Senate in June 2022, and addresses Securities and Exchange Commission (SEC) and Commodities Futures Trading Commission (CFTC) jurisdiction, stablecoin regulation and crypto taxation, among other issues.

The wide-sweeping bill has faced delays, likely due to its complexity for non-crypto-versed Senators. Lummis and Gillibrand have since revised the bill and are expected to release the next draft soon.

“This is the work that Senator Lummis and Senator Gillibrand put in on the Senate side, but this is going to be our attempt in the House [of Representatives],” he said.

Commenting on the revised bill, Lummis suggested that this iteration will likely have an additional focus on “national security interests” such as cyber security.

“Some of the people that I speak to that remain very skeptical about digital assets are concerned that cybercrime is not adequately addressed in our bill. So I think you’ll see a stronger cybercrime aspect to our bill. I think you’ll see some provisions that require certain registration […] so that companies are properly regulated and vetted,” she said.

In my estimation, the reason so many young Americans are into #Bitcoin is because it is #soundmoney. The federal govt’s blank check spending habit, coupled with the complete erosion of the gold standard and the development of the internet, led us here. Inevitable.

— Cynthia Lummis (@CynthiaMLummis) April 25, 2023