"Congress has a responsibility to ensure that investors are protected without unduly preventing growth."
So said U.S. Rep. Randy Hultgren of Illinois during a Wednesday hearing of the House Capital Markets, Securities and Investment Subcommittee, which met in the morning in Washington, D.C. Drawing a mix of academic and industry witnesses, the hearing highlighted the divergent viewpoints on the technology held by some of the members of Congress.
As is perhaps unsurprising, the hearing saw U.S. lawmakers strike both supportive and critical tones on cryptocurrency – one member called cryptocurrencies a "crock" in an opening statement while Rep. Tom Emmer, who appeared at a blockchain industry event last week, remarked that they constitute "a huge topic that cannot possibly be scratched even in five minutes."
Yet ultimately, many subcommittee members expressed a commitment to strike a balance between oversight and the accommodation of technological innovation.
Many of the questions focused on the regulatory parameters in place in the U.S. today, with some of those queries aimed at Mike Lempres, chief legal and risk officer for Coinbase and the sole representative from a startup working in the exchange space. Lempres, who joined the company in early 2017, advocated for a balanced approach to regulating the space.
Indeed, some of the members voiced a strong appetite for tackling regulation through legislative acts.
Rep. Maloney, who is the ranking Democrat on the subcommittee, explained that she is working on a cryptocurrency oversight bill that would cover exchanges that offer trading services for digital assets. And Rep. Bill Huizenga of Michigan, who is the chairman of the Capital Markets, Securities and Investment subcommittee, all but declared his intention to pursue some kind of legislative action.
"This panel, this Congress is not going to sit by idly with a lack of protection for investors."
Notably, one of the panel members highlighted the interest apparently being expressed back home in his Congressional district.
Speaking during the hearing, Rep. Keith Ellison of Minnesota said that the topic had come up during recent weeks.
"In my meetings with constituents over the last several months, I've had many of them say 'Hey, what's going on with this cryptocurrency, should I get into it?'" he remarked, going on to ask:
"If somebody wants to invest in this area what should they know as an unsophisticated investor?"
That question was fielded by Dr. Chris Brummer, a professor of law at the Georgetown University Law Center, who advised caution on that front.
"I would certainly say that given the complexity of many of these instruments that it's very dangerous," he said.
Less, not more
By contrast, it was Rep. Tom Emmer – who is a member of the Congressional Blockchain Caucus – who took what was perhaps the most contrarian view compared to the remarks from Maloney and Huizenga.
"I find myself maybe not with my colleagues on some of this," he said during the hearing, going on to say: "Yet I hear elected officials who don't have any concept of what we're doing here ... talking about 'we have to go in and regulate.'"
Emmer remarked that that blockchain's potential in opening up capital access is "something Democrats and Republicans should celebrate." He also struck a favorable tone in comparison to some of the panelists – who argued that more clarity is needed around the regulations in place today versus the imposition of new rules on the industry.
"I realize there has to be some regulation, but it's the balance," Emmer remarked. "And I've heard from the panel we have regulation in place but we just need clarity."
Even still, there was a palpable sense of wanting to strike the right balance among the committee members. This sentiment was perhaps expressed best by Rep. Ted Budd, who argued that oversight in this area is something that the U.S. "has to get right."
"Regulation in this space is something that the U.S. has to get right. Because poor or rushed policy in cryptocurrencies really threatens our reputation in finance and technology."
Image via Financial Services Committee/YouTube