In December, cryptocurrency executives testified before the House Financial Services Committee that they would like clearer guidance because the lack of a federal framework is causing uncertainty and inconsistent oversight at both the federal and state levels. These comments are not unique to cryptocurrency[1] executives, but mirror recent ones from cannabis[2] and data privacy[3] leaders.

Overview

Before the hearing, Congresswoman Maxine Waters (D-CA), chairwoman of the committee, issued a press release[4] acknowledging the uncertainty faced by the industry: “Currently, cryptocurrency markets have no overarching or centralized regulatory framework, leaving investments in the digital assets space vulnerable to fraud, manipulation, and abuse.” Six cryptocurrency CEOs testified at the hearing, including Bitfury Group CEO Brian P. Brooks and Coinbase CEO Alesia Jeanne Haas.

Brooks highlighted three “threshold issues” in his prepared remarks before the committee: (1) whether crypto activities should be included within the regulated financial system, (2) what the “national policy is for a decentralized Web 3 powered by cryptoassets,” and (3) risks inherent within the current decentralized policy structure.[5]

Likewise, Haas addressed these “key challenges” in her remarks: (1) the need for a “purpose-built crypto tax code,” (2) the benefits of “controls and oversight for illicit finance,” and (3) her belief that “existing regulatory regimes often do not accommodate this new technology.” Haas argued that Congress should designate a single regulator to provide the required oversight.[6]

We’re Here to Help

There is no unified federal regulation currently pending, and unless Congress takes the lead, the cryptocurrency industry will remain subject to a patchwork of state and federal laws. Troutman Pepper’s Regulatory Practice Group includes one of the nation’s oldest and most well-respected state attorneys general and federal regulatory practices. We’re ready to help you navigate these complex issues.

[1] https://www.regulatoryoversight.com/2021/10/doj-creates-cryptocurrency-enforcement-team/

[2] https://www.regulatoryoversight.com/2021/11/bipartisan-group-of-attorneys-general-call-for-federalism-to-guide-cannabis-policy/

[3] https://www.regulatoryoversight.com/2021/10/ftc-reports-to-congress-on-data-security-and-privacy-priorities/

[4] https://financialservices.house.gov/news/documentsingle.aspx?DocumentID=408893

[5] https://financialservices.house.gov/uploadedfiles/hhrg-117-ba00-wstate-brooksb-20211208.pdf

[6] https://financialservices.house.gov/uploadedfiles/hhrg-117-ba00-wstate-haasa-20211208.pdf