As crypto market wobbles, ‘urgency’ sets in among Washington lawmakers

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– The value of the crypto ecosystem has fallen nearly $2 trillion over the span of a few months, and there are two separate bankruptcy proceedings where customers are fighting to recover their assets. This has caught the attention of lawmakers.

– Sen. Kirsten Gillibrand, co-sponsor of a major crypto regulation bill, said on Tuesday that “there’s more urgency now” in moving legislation to protect consumers.

– Gillibrand’s colleagues on Capitol Hill “have seen that this is something that’s important to do, that consumers are not being protected today,” the New York Democrat said in a video interview for Bloomberg’s Crypto Summit.

– Action may still have to wait until next year, according to Sen. Cynthia Lummis, the Republican co-sponsor with Gillibrand of the Responsible Financial Innovation Act.

– Lummis said the bill’s stablecoin provisions, which include rules on who can offer the coins and reserve requirements, could be reviewed by the Senate Banking Committee in the coming months.

– Gillibrand said provisions governing the Commodity Futures Trading Commission’s authority over coins deemed commodities, likely including bitcoin, could also go before the Senate Committee on Agriculture, Nutrition and Forestry this year.

– The challenge is that urgency does not assure consensus. While industry groups have offered support for the Lummis-Gillibrand bill, consumer advocates say it would undermine existing investor protections by pulling too much authority from the Securities and Exchange Commission in favor of the CFTC.

– In a letter to House and Senate committee chairs Wednesday, the Chamber of Progress tech industry trade group noted that there are at least 35 crypto-related bills in Congress and called on lawmakers to hold hearings on the best path forward for crypto regulation.

– The SEC’s role in governing crypto is already a point of contention. At a congressional subcommittee hearing Tuesday, SEC Enforcement Director Gurbir Grewal was told the agency is taking too heavy a hand against crypto in some respects and has been too timid in others.

 

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