"Congressional action is essential to provide clear rules of the road and robust oversight for digital asset market participants and intermediaries," said Dusty Johnson, R-S.D., chairman of the Commodity Markets, Digital Assets and Rural Development Subcommittee. "The right policy solution involves both committees speaking with one voice to appropriately direct the CFTC and the SEC to each focus on what they do best."
However, ranking member Stephen F. Lynch, D-Mass., said he worried about "feeding into industry-fueled narratives about a turf war" between the SEC and CFTC, adding that "the problem is not regulatory ambiguity; it is mass non-compliance with existing laws."
French Hill, R-Ark., chairman of the Digital Assets, Financial Technology and Inclusion Subcommittee, called out some of his Democratic colleagues for their recent assertions that cryptocurrency firms can simply follow the law as is and are choosing to be non-compliant — an assertion that SEC Chairman Gary Gensler has made as well.
At a subcommittee hearing last month, Mr. Lynch and House Financial Services Committee ranking member Maxine Waters, D-Calif., both said creating a new regulatory framework for cryptocurrency is unnecessary.
"No one here is claiming that crypto should be exempt from rules or that we should create an entirely new regime for it," Mr. Hill said Wednesday. He also cited previous statements made by Mr. Lynch and Ms. Waters, showing they have supported digital asset legislation.
In her opening statement Wednesday, Ms. Waters seemed to support new laws for cryptocurrency regulation, stating that she hopes Congress "can quickly return to developing legislation together."
Timothy Massad, a research fellow at the Harvard Kennedy School Mossavar-Rahmani Center for Business and Government and former chairman of the CFTC, suggested creating a self-regulatory organization to regulate cryptocurrency, in which both the SEC and CFTC work together. A working example of an SRO is the Financial Industry Regulatory Authority, Mr. Massad said.
Though Matthew B. Kulkin, partner at Wilmer Cutler Pickering Hale and Dorr, and chairman of its future and derivatives practice, said at the hearing that he worries "creating a new SRO from scratch would take time," and there's no need to "re-create the wheel."