House Ag Committee looks at digital assets regulatory bill, Dems ask how to pay for it : omgfin

Rostin Behnam, chair of the CFTC, a slew of former regulators, and a legal officer testified before the full Agriculture Committee.

The hearing on digital asset regulation held on June 6 by the Agricultural Committee of the United States House of Representatives probably holds the record if there ever was one. Rostin Behnam, the current chair of the Commodity Futures Trading Commission (CFTC), was joined by an ex-chair, an ex-acting chair, and a former commissioner. Paul Grewal, chief legal officer, was also present.

Behnam alone spoke and answered questions for more than two hours during the hearing, which was also very long. The draft bill that was written by committee chair Glenn Thompson and House Financial Services Committee Chair Patrick McHenry was the topic of the hearing.

In his opening remarks, Thompson expressed his hope that the Republicans' bill would result in a joint committee legislative proposal that was supported by both parties.

Popularity-based advisory group members gave a few indications of recoiling from this expectation. The Democrats pointed out that they only got to see the 162-page bill last week, which was described as "incredibly complex."

Thompson emphasized that the bill is only a draft, but it is crucial because:

“Current federal laws and regulations provide few rules of the road […], leading to complicated enforcement actions by regulators and creating further confusion in the industry and market."

Behnam informed the committee that the bill does not alter existing regulations or authority. Instead, it fills in the gaps, particularly in the spot market for non-secularized digital assets. Rick Crawford, a committee member, said that Joe Shmo was "at a vape shop selling cryptocurrency" because of this gap. Bankers are staying away from the emerging asset class while it is still unregulated.

Related: 61 cryptocurrencies are now seen as securities by the SEC

The Thompson-McHenry bill would change the technique for characterizing protections and wares to one in view of how the resource was exchanged — whether acquired from the guarantor or purchased on a trade — and the degree of decentralization as an acclimation to the "standards-based administrative system" currently set up. Commodities are traded on exchanges, while securities are typically purchased from issuers.

Additionally, the bill would define digital commodity brokers and dealers in a new way without affecting the fundamental elements of market structure.

According to Behnam, the regulatory void affects 60% of the market for digital assets. He was referring to the Bitcoin (BTC) market. Behnam pronounced Ether (ETH) an item, not a security, decisively, rather than Protections and Trade Commission Seat Gary Gensler, who would not make that qualification at a House Monetary Administrations Board hearing in April.

Behnam was less enthusiastic about the bill's provisional registration period, which would provide intermediaries with limited exemption from the bill's requirements while final rules were being drafted. Behnam depicted it as "binding" controllers.

Approving the CFTC to cover the administrative hole in the computerized resource guidelines would give the office an extensively more extensive transmission and cost cash. Numerous Democratic committee members pointed out that the bill does not include a funding mechanism, and the House Appropriations Committee has proposed cutting the CFTC's funding.

Behnam stated that the CFTC's current budget is $360 million; however, the agency has requested $410 million for the following fiscal year, and the Appropriations Committee has proposed $345 million. Behnam stated that the agency would have to lay off employees if that budget cut was implemented.

Over the course of three years, the CFTC would require an additional $120 million from the digital asset regulatory bill. New computer hardware and software, as well as three rule-making teams, would be covered by the additional funds. It could take up to four years to make rules.

(DEREK ANDERSEN, CoinTelegraph, 2023)

House Ag Committee looks at digital assets regulatory bill, Dems ask how to pay for it Print

Rostin Behnam, chair of the CFTC, a slew of former regulators, and a legal officer testified before the full Agriculture Committee.

Behnam alone spoke and answered questions for more than two hours during the hearing, which was also very long. The draft bill that was written by committee chair Glenn Thompson and House Financial Services Committee Chair Patrick McHenry was the topic of the hearing.

In his opening remarks, Thompson expressed his hope that the Republicans' bill would result in a joint committee legislative proposal that was supported by both parties.

Popularity-based advisory group members gave a few indications of recoiling from this expectation. The Democrats pointed out that they only got to see the 162-page bill last week, which was described as "incredibly complex."

Thompson emphasized that the bill is only a draft, but it is crucial because:

Related: 61 cryptocurrencies are now seen as securities by the SEC

Additionally, the bill would define digital commodity brokers and dealers in a new way without affecting the fundamental elements of market structure.

Behnam was less enthusiastic about the bill's provisional registration period, which would provide intermediaries with limited exemption from the bill's requirements while final rules were being drafted. Behnam depicted it as "binding" controllers.

Behnam stated that the CFTC's current budget is $360 million; however, the agency has requested $410 million for the following fiscal year, and the Appropriations Committee has proposed $345 million. Behnam stated that the agency would have to lay off employees if that budget cut was implemented.

Over the course of three years, the CFTC would require an additional $120 million from the digital asset regulatory bill. New computer hardware and software, as well as three rule-making teams, would be covered by the additional funds. It could take up to four years to make rules.

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