In this Congress, House Republicans will create a special subcommittee exclusively for cryptocurrencies, putting supervision and legislation around the ailing industry at the top of the GOP agenda.
In an interview on Thursday, incoming Financial Services Chair Patrick McHenry (R-N.C.), who has long prioritized financial technology concerns, said he plans to form the panel because he believes there is a major void in how we structure the committee as it devotes more time to crypto issues.
New Panel For Cryptocurrency Business
Rep. French Hill (R-Ark.) will lead the subcommittee on digital assets, financial technology, and inclusion. Hill has led Republican attempts to examine the possibility of a central bank digital currency. Rep. Warren Davidson (R-Ohio), an additional notable crypto advocate in the House, will serve as vice chair of the panel.
McHenry disclosed the decision while announcing larger plans for the Financial Services subcommittees and their chairs.
Following a difficult year for digital currencies, Republican lawmakers on Thursday night announced the formation of a new subcommittee that will supervise the crypto and fintech sectors. This is the first committee of its sort to be established in the United States.
In a statement, Hill, who was also named vice chair of the larger committee, said that for FinTech innovation to flourish safely and effectively in the United States, a bipartisan effort is required.
After the collapse of the cryptocurrency exchange FTX in November, late last year, the unregulated nature of the business became a serious issue. The creator of FTX, Sam Bankman-Fried, was detained last month on suspicion of fraud and freed on a $250 million bond as he awaits trial.
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FTX Scandal
Hill has been an ardent advocate for the crypto business. In 2021, he co-sponsored the Central Bank Digital Currency (CBDC) Study Act and stated that the Federal Reserve must not delay its vital work on a possible CBDC.
In 2019, even before FTX became a household name, Hill urged the IRS to improve its tax instructions for cryptocurrency users.
Even though Bankman-Fried operated out of the Bahamas, he was a savvy Washington operative, cultivating contacts with powerful figures such as Representative Maxine Waters (D-Calif.) and the head of the Commodity Futures Trading Commission, Rostin Benham.
In the midterm elections of 2022, Bankman-Fried contributed about $40 million in publicly stated contributions, primarily to Democrats. He and his allies contributed to candidates on both sides of the political divide.
Federal regulators believe that Bankman-Fried violated campaign financing laws while committing an $8 billion fraud.
The failure of FTX and Bankman-subsequent Fried’s indictment has presented Republicans such as Emmer with sufficient opportunity to criticize the work of regulators. Gary Gensler, the chairman of the Securities and Exchange Commission, was labeled as disorganized and lackadaisical by Senator Emmer.
In the meantime, Senate Democrats have already begun preparing their own initiatives to control the crypto industry and prescribe enforcement measures.
Since FTX’s collapse into bankruptcy, the SEC has increased its degree of activity. The commission charged cryptocurrency lender Genesis and cryptocurrency exchange Gemini with the unlicensed sale and issuance of securities on Thursday, the same day Hill announced the subcommittee.
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