Crypto industry leaders urge Congress to act on digital asset regulations amid SEC crackdown

The House Financial Services Committee will hear testimony from five key blockchain industry figures on June 13 as the U.S. government grapples with how to address an increasingly urgent regulatory problem.

The hearing, titled “The Future of Digital Assets: Providing Clarity for the Digital Asset Ecosystem,” features testimonies from Circle CEO Jeremy Allaire, former SEC attorney Coy Garrison, Ava Labs CEO Emin Gün Sirer, National Futures Association CEO Thomas Sexton, and Prometheum CEO Aaron Kaplan.

The hearing comes at a critical time as the U.S. Securities and Exchange Commission has recently taken legal action against two major cryptocurrency exchanges, Coinbase and Binance, underscoring the urgent need for regulatory clarity in the digital asset space.

Maintaining US tech leadership

The transformative potential of digital currencies was at the forefront of today’s witness testimonies. Jeremy Allaire, Co-Founder, Chairman, and CEO of Circle, and Dr. Emin Gün Sirer, Founder & CEO of Ava Labs, both emphasized the potential of digital currencies and blockchain technology, respectively, for positive social infrastructure in their prepared remarks.

Allaire highlighted the importance of the U.S. ensuring that the dollar remains the most competitive currency on the internet in his prepared remaks. As stablecoins would play a critical role in maintaining dollar dominance, Allaire supports the yet-unnamed stablecoin bill as a critical first step.

Meanwhile, Dr. Sirer offered his perspective on the technology itself as a computer scientist. He emphasized the transformative potential of blockchain technology, comparing its impact to that of the Internet while warning that, without sensible frameworks and collaboration, the U.S. would risk losing technological leadership to other countries.

“Workable  regulatory framework”

The speakers agreed on the need for greater clarity surrounding digital asset regulations.

Coy Garrison, a partner at Steptoe & Johnson LLP, and Thomas W. Sexton, President and CEO of the National Futures Association (NFA), stressed the importance of robust regulation and customer protection.

Garrison criticized the SEC for its current approach, which relies on enforcement actions rather than creating a workable regulatory framework for digital assets. He urged Congress to direct the SEC to engage in rulemaking to bring clarity to these issues.

Sexton, meanwhile, advocates for the extension of regulatory authority to cover spot digital asset commodity activities and the adoption of a federal registration regime for market participants in this area.

Aaron Kaplan, Co-CEO and Founder of Prometheum Inc., a firm that recently navigated the SEC’s regulatory process successfully, provided testimony from that perspective. Kaplan argues that the SEC and the Financial Industry Regulatory Authority (FINRA) have already laid out a compliant path for crypto in the U.S.

Congressional responsibility

While there is agreement on the need for clear regulations, the witnesses differ on how to achieve this. Allaire and Sirer focus more on the potential of digital assets and the role of stablecoins, while Garrison, Sexton, and Kaplan emphasize the legal and regulatory challenges facing the industry.

The key takeaway from the prepared remarks is that the need to define “regulatory clarity” is not just pressing but urgent. While the SEC moves decisively against Binance and Coinbase with confidence, the public discourse has demonstrated these issues to be, at minimum, points of substantial confusion.

Today’s hearing underscores the role of Congress in American financial regulatory policy and its witnesses have called upon the legislative body to act now.