In a Senate Agriculture Committee hearing on CFTC oversight, Senator Kirsten Gillibrand announced a new draft of her crypto bill. The committee discussed the CFTC’s limitations when it comes to crypto markets, with members expressing concerns over fraud and criminal use. Despite being a farm bill year, the committee acknowledged the importance of federal oversight in the crypto industry.
Senators Express Concerns About Criminal Use Of Crypto
Leo Schwartz, a reporter for Fortune Magazine, live-tweeted the hearing, noting that the committee has been relatively quiet this year regarding crypto. However, the committee hosted an FTX-focused hearing in December, and Schwartz speculated on whether crypto and digital assets would be a focus of the hearing.
However, Senator Debbie Stabenow opened the hearing by warning of the volatility and fraud present in the industry, highlighting the need for federal oversight. Ranking member Boozman spoke about the CFTC’s role and expressed confidence in its ability to regulate the digital commodity spot market.
Chair Rostin Behnam reiterated the CFTC’s limitations when it comes to crypto markets, highlighting the need for legislation that could help prevent fraud before it happens.
Senator Roger Marshall expressed his concerns about the criminal use of digital currencies and questioned the activities of Binance. He cited Binance as having laundered billions of dollars. Senator Sherrod Brown also expressed concerns about crypto markets and their potential for fraud and manipulation.
Other senators, including Tuberville, Klobuchar, and Durbin, also shared their views on the crypto industry and its regulation. Behnam praised Gillibrand’s new crypto bill as being comprehensive, covering stablecoins, custody, cybersecurity risk, and other important issues.
The hearing highlighted the differing views of the CFTC and SEC regarding Ether, with Behnam insisting that it is a commodity, while the SEC has yet to make a definitive ruling. The issue of stablecoins was also discussed, with Behnam stating that they are going to be commodities in his view, potentially setting up another conflict with the SEC.
The committee discussed various crypto bills, with Senator Roger Marshall expressing concerns over criminal use and Binance’s alleged laundering of $2.35 billion. Behnam ranked his concern over digital assets markets at 7.5 out of 10, while Senator Sherrod Brown expressed a higher concern level.
The committee discussed the definition of commodities versus securities in relation to digital currencies. Behnam stated that Bitcoin, Ether, and Tether are commodities, while Gensler has said that every cryptocurrency is likely a commodity except for Bitcoin.
Senator Amy Klobuchar asked Behnam about his current views on crypto markets, to which Behnam stated that he does not see the current bear market as a permanent change.
Towards the end of the hearing, Gillibrand announced a new draft of her bill with Senator Lummis, set to be released mid-April. Behnam praised the bill for being comprehensive and addressing stablecoins, custody, and cybersecurity risk. He also stated that stablecoins are commodities in his view, potentially setting up a conflict with the SEC.
However, the Senate Agriculture Committee’s hearing on CFTC oversight highlighted the importance of federal oversight in the digital assets industry, with members expressing concerns over fraud and criminal use. Additionally, announcing a new draft of Senator Gillibrand’s bill adds to the ongoing discussion surrounding federal regulation in the industry.
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