WASHINGTON – U.S. Senator Debbie Stabenow (D-Mich.), Chairwoman of the
Senate Committee on Agriculture, Nutrition, and Forestry, released the following statement at a hearing titled “Oversight of Digital Commodities.” Live video of the hearing is available here.
Stabenow’s Statement, as prepared for delivery, follows:
The last time this Committee gathered to discuss digital assets—in December 2022—we were closing out a year in which investors lost 2 trillion dollars in the crypto market. Losses from hacking were at an all-time high and some of the most recognizable crypto firms had not only gone bankrupt, but had stolen customer funds in brazen fashion.
And at the end of last year, the largest crypto exchange in the world and its founder were found guilty of willfully evading anti-money laundering laws and enabling the financing of terrorism.
Meanwhile, the public seems undeterred. The crypto market has rebounded to nearly record highs. Bitcoin is trading at nearly $60,000.
And as institutional investors pile into Bitcoin and Ether derivatives and exchange-traded products, the interconnection between crypto and traditional financial markets is increasing.
But the trading of digital commodities like Bitcoin and Ethereum are not overseen by any federal regulator. These and other digital assets that are not securities account for most of the value traded in crypto markets.
If recent history is any guide, we cannot afford to wait any longer to regulate these assets. The time to act is now.
This is why Senator Boozman and I have been steadfast in our effort to advance bipartisan legislation that would give the CFTC regulatory authority over digital commodities.
We have a lot of important work to do this year in the Committee and I am committed to building bipartisan coalitions both here and on a Farm Bill so that together, we can make good law that supports and protects our collective constituents.
We must have clear, common-sense rules of the road that allow good actors to innovate and grow. Blockchain technology can help us manage data and move money in more efficient and transparent ways, but those goals cannot be realized without comprehensive federal legislation. Our counterparts around the globe recognize this, and the U.S. must as well.
But most importantly, we owe it to the American public to protect them from bad actors exploiting digital assets for personal gain at the expense of their customers. It is not enough to bring enforcement actions after the money is gone. Financial regulators need the tools to stop abusive conduct before it happens.
I believe any legislation that advances through this Committee should focus on three key pillars.
The first pillar is similar rules for similar risks. Crypto firms must safeguard customer assets, hold sufficient capital reserves, and abide by rigorous cybersecurity standards—just like traditional financial market participants.
The second pillar is protecting retail customers. Customers should have access to accurate information about their investments, presented in a way that is appropriate for their level of experience. Financial markets must be fair for all participants; free of conflicts of interest that give the few an unfair advantage over the many.
The third pillar is adequate, permanent funding for the CFTC to oversee the digital commodity market. Without it, we not only handicap the agency’s work in this evolving market, but we imperil the essential work it is doing in overseeing our nation’s derivatives markets.
Our colleagues in the House have recognized that protecting customers and providing clear rules of the road is not a partisan issue and have passed crypto market structure legislation out of their Chamber. While our bill takes a somewhat different approach and focuses on filling the regulatory gap that exists for digital commodities, I am confident we can come together to pass legislation that brings greater integrity to the crypto market.
Today, we’ll hear from Chairman Behnam about how the CFTC has been on the front lines, policing the crypto markets for fraud and abuse. But we will also hear about the limit of his agency’s authority and the challenges this poses to protecting customers and our markets. I appreciate his expertise and his testimony, and I welcome him to our Committee.
I will now turn to Ranking Member Boozman for his opening remarks.
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