The hearing on digital asset regulation on Thursday in the United States House of Representatives was an important topic. Although the chairman of the House Agriculture Committee’s subcommittee on commodity exchanges, energy and credit Sean Maloney specified that it would focus on gaps in monitoring and regulation of derivatives and the underlying spot market, discussions were widespread.
The Agricultural Committee oversees the Commodity Futures Trading Commission (CFTC), which, along with the Securities and Exchange Commission (SEC), regulates financial markets.
Chainalysis co-founder and chief strategy officer Jonathan Levine said in his testimony that the transparency of cryptocurrencies provides unparalleled insight into the markets, including their risks. Blockchain can unlock information about the entire network behind illegal activities.
Georgetown University law professor Christopher Broomer explained that the disclosure law assumes that the issuer does not have access to the consumer information, whereas the blockchain is transparent but difficult to understand.
In terms of consumer protection, Brammer said several times, “Disclosure should be read, not just filed,” adding that increasing the complexity of disclosure can create vulnerabilities for consumers.
Charles Hoskinson, CEO of Input Output Global, spoke about the “mindset” and emphasized the importance of principles and the need to strive for “rigority over efficacy” in a rapidly evolving global market. He later expressed the view that none of the regulators are doing a good job with the Know Your Customer/Anti-Money Laundering safeguards at this point in time.
As participants moved on to more specific questions, CFTC Market Oversight Division Director Vincent McGonagall said that his agency has the expertise to oversee the cash market for crypto. That market is now regulated by state money transmission laws, but there are several proposals to give CFC authorization on it. State laws have a different purpose from the CFTC’s concerns, McGonagall said, and centralized clearing adds a layer of consumer protection.
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McGonagall said digital assets are defined as commodities, but the SEC can determine when they are securities. Determining the point at which securities are fully decentralized and no longer subject to SEC oversight is a “tangled web”, McGonagall continued, and no legal mechanism to transfer those commodities back to CFTC oversight. Is.