FOR IMMEDIATE RELEASE
April 27, 2023
William Pierre-Louis, Jr.
House Hearings on Crypto Likely Another Missed Opportunity for Crypto Accountability
Advocates claim Congress’ focus on so-called crypto innovation may come at the expense of consumer protection
Washington, D.C. – New Congressional hearings today on crypto regulation will likely fail to adequately address the many risks that the industry posed to consumers, investors and financial markets by crypto assets and actors, according to advocates with Americans for Financial Reform and Demand Progress.
“Déjà vu in Congress is rarely a good thing, yet here we are again, with some Members of Congress giving the crypto industry an uncritical platform to advocate for weak, permissive regulatory standards in the name of innovation, ” said Mark Hays, senior policy analyst with Americans for Financial Reform and Demand Progress. “Lawmakers’ approach offers little pushback to the industry’s hollow claims and damage. It’s almost as if the crypto crash never happened – at least for some inside the Beltway.”
Polls consistently show most Americans have soured on crypto due to the recent crash and widespread examples of fraud, fragility and bad behavior found throughout the industry. Yet some Members of Congress continue to defend the industry and place the blame instead on regulators for simply enforcing existing laws. And, advocates believe today’s hearings, held by the House Financial Services and House Agriculture Committees, will pave the way for proposals that will undermine regulators’ ability to effectively protect consumers and investors from exploitative crypto business practices and risky behavior.
“Regulators protected many investors and consumers from more harm by keeping crypto out of the mainstream financial system,” Hays added. “Congress’ response should be to empower regulators to maintain those standards, not to reward the crypto industry for bad behavior by giving them light-touch treatment.”
Americans for Financial Reform and Demand Progress believe any discussion of appropriate approaches to crypto regulation should being with the following points in mind:
- Policymakers should first ‘do no harm’: Congress should avoid pursuing legislative proposals for crypto that would establish a light-touch regulatory approach that would fail to adequately protect consumers and investors; legitimize risky crypto business practices, and expose markets and market participants outside the crypto sector to more risk.
- Policymakers should defend and bolster existing financial regulatory frameworks: Members of Congress should be wary of pursuing legislative proposals from crypto that could also undermine existing regulatory standards for financial assets and actors.
- Policymakers should lend support to regulators’ ongoing efforts to exercise oversight and accountability: Instead of attacking regulators like the SEC and others for enforcing existing securities laws in the face of widespread non-compliance by actors within the crypto industry, Members of Congress should offer support for the SEC and other regulators that have proactively sought to protect consumers and investors from the harms found within the crypto sector. Increased funding to support further regulatory oversight for the industry is one concrete way lawmakers could demonstrate this support.