Congressional Testimonies Clash: Balancing Crypto Regulation and Innovation

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As the digital asset industry and federal agencies experience ongoing tension, top legal officers and a former regulator are set to testify in front of US congressional committees on Wednesday. The House Finance Services Subcommittee on Digital Assets, Financial Technology and Inclusion, together with the House Agriculture’s Commodity Markets, Digital Assets, and Rural Development subcommittee, will hear from Kraken’s Chief Legal Officer Marco Santori and former Commodity Futures Trading Commission Chair Timothy Massad.

According to Santori, the current US regulatory situation is untenable, especially as other countries forge ahead in the realm of cryptocurrency regulation. During the testimony, Santori plans to discuss how regulators can improve their interaction with the cryptocurrency sector. He argues that Congress needs to provide regulators with the tools necessary to “foster safe, efficient markets or protect consumers.” In addition, he contends that the current environment of frequent litigation is counterproductive, preventing companies like Kraken from effectively planning for the future or allocating resources.

On the other hand, Massad, who will also testify, suggests that Congress should direct the Securities and Exchange Commission to develop joint rules for cryptocurrency regulation. This can be done by creating a new self-regulating organization, supervised by both agencies and tasked with enforcing the rules. Massad believes this approach is simple, practical, feasible, and can be implemented quickly and efficiently without causing confusion or rewriting existing laws.

Other individuals set to testify include Andrew Durgee, Head of Global Technology Firm Republic; Matthew Kulkin, Partner at Wilmer Cutler Pickering Hale and Dorr LLP; and Daniel Schoenberger, Chief Legal Officer at Web3 Foundation. Durgee warns in his written testimony that the US risks falling behind other countries due to the lack of clear and supportive regulation. He claims that businesses and investors may be deterred from engaging in the domestic digital asset market, leading to negative consequences for the US economy.

The upcoming testimonies reflect differing opinions regarding cryptocurrency regulation strategies, highlighting the struggle to find a balance between proper oversight and fostering innovation. While some advocate for arming regulators with the tools necessary to ensure market safety, others emphasize the need for a streamlined, self-regulating organization. The discussion surrounding the regulation of digital assets continues to evolve, emphasizing the importance of striking a balance that promotes both consumer protection and industry growth.

Source: Cryptonews

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