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What to Expect When Congress Talks Crypto (Twice) Tomorrow

It’s a crypto doubleheader on Capitol Hill tomorrow.

Two U.S. House of Representatives Committees will be hosting hearings on Wednesday to look at the topic from two distinct angles.

The House Committee on Agriculture will focus on the emergence of “digital assets” while the Financial Policy Subcommittee hearing will examine “the extent to which the United States government should consider cryptocurrencies as money,” as previously reported.

According to new information published Tuesday, the Agriculture Committee hearing will notably see former JPMorgan blockchain lead and current CEO of Clovyr Amber Baldet, former Commodity Futures Trading Commission (CFTC) chairman Gary Gensler and Andreessen Horowitz managing partner Scott Kupor, among others, testify.

“This hearing will shed light on the promise of digital assets and the regulatory challenges facing this new asset class. Our committee has a deep interest in promoting strong markets for commodities of all types, including those emerging through new technology,” Rep. Michael Conaway, chairman of the committee, said in a statement.

By contrast, the Financial Services hearing seems to be tackling the broader question of what cryptocurrencies are exactly. According to a memo detailing the hearing’s goals, members “will evaluate the merits of any uses by central banks of cryptocurrencies, and discuss the future of both cryptocurrencies and physical cash.”

As of press time, none of the committee members contacted by CoinDesk responded to requests for comment, leaving the question of sentiment around the topics an open one ahead of the hearings.

Yet as for what those tuning in can expect, one might want to refer to the last few times Congress tackled the subject.

Back in March, for example, a hearing on initial coin offerings – likely to emerge during the testimonies tomorrow – saw lawmakers argue for greater protections while Representative Tom Emmer called for more regulatory restraint. A hearing in May saw lawmakers discuss the “almost limitless” applications of the tech, to borrow a phrase from one Department of Homeland Security official.

Luckily for those hoping to follow the action, the hearings – which will be live streamed – are spaced out throughout the day. The Agriculture Committee’s gathering is set for 10 a.m. EDT, with the Financial Services Committee’s hearing scheduled for 2 p.m. EDT. B

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Congress Is Now Holding Two Crypto Hearings This Wednesday

Congress is set to hold not one but two separate hearings related to cryptocurrencies on Wednesday.

Last week, CoinDesk reported that the House Committee on Financial Services is set to hold its latest gathering on the subject, this one honing in on the question of crypto as a new form of money. A memo published since that news first broke notably states that members will examine “the extent to which the United States government should consider cryptocurrencies as money and the potential domestic and global uses for cryptocurrencies.”

That same day, the House Agriculture Committee will hold a hearing entitled “Cryptocurrencies: Oversight of New Assets in the Digital Age.” In a statement, chairman Michael Conaway explained that the hearing seeks to “shed light on the promise of digital assets and the regulatory challenges facing this new asset class.”

It’s a noteworthy statement, declaring that at least some in the U.S. national legislature hold the view that cryptocurrencies constitute a new kind of asset.

“Our committee has a deep interest in promoting strong markets for commodities of all types, including those emerging through new technology,” Conaway added.

Together, the hearings represent a double-header of sorts, and CoinDesk has confirmed both hearings will be live-streamed from Capitol Hill, Washington, DC. The Agriculture Committee hearing will take place at 10 a.m. EST while the Financial Services Committee’s hearing will occur at 2 p.m. EST.

According to the Financial Services Committee memo, the witnesses set to appear are: Dr. Rodney Garratt of University of California Santa Barbara; Dr. Norbert Michel of the Heritage Foundation’s Center for Data Analysis; Dr. Eswar Prasad, a senior fellow at the Brookings Institution; and Mr. Alex Pollock, a senior fellow for the R Street Institute.

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Strong Words, Little Action: ICOs Draw Fire at US Congress Hearing

“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 to ask questions on the topic. Drawing a mix of academic and industry witnesses, the hearing highlighted some of 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.”

Constituent interest

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 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 expressed a degree of caution in that context.

“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 spoke with CoinDesk on the sidelines of last week’s DC Blockchain Summit – 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 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.”

He remarked:

“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.”

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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ICOs Go to Washington: What to Expect When Congress Talks Crypto

Cryptocurrencies are heading back to Capitol Hill on Wednesday.

On March 14, a subcommittee of the U.S. House of Representatives Financial Services Committee will hold a hearing entitled “Examining Cryptocurrencies and ICO Markets.” The hearing marks the first time a group within Congress will specifically tackle the question of initial coin offerings (ICOs), an area that is firmly in the cross-hairs of agencies like the Securities and Exchange Commission (SEC) as well as regulators around the world.

Statements from some of the members of the Capital Markets, Securities and Investment Subcommittee suggest that the hearing will have a largely educational bent. Speaking to CoinDesk last week, U.S. Representative Tom Emmer indicated that some of those attending are there to learn more about cryptocurrencies and token sales.

“I think this is going to be more elementary,” he said during an interview on the sidelines of last week’s DC Blockchain Summit in Washington, D.C. “I don’t think they understand the depth or breadth of this thing – yet.”

Other comments speak to the “appetite” for discussion that Emmer highlighted. In a statement to CoinDesk, Rep. Randy Hultgren expressed a desire to talk about investor protections as they relate to ICOs.

“I look forward to discussing how cryptocurrencies can open up new opportunities in our financial markets. Specifically, I’m interested in discussing how to balance access to credit and investor protection as it relates to so-called initial coin offerings,” he said.

A previously published list of witnesses certainly reinforces the informational nature of the hearing. Set to appear are Dr. Chris Brummer, a law professor from Georgetown University; Mike Lempres, Coinbase’s chief legal and risk officer; Peter Van Valkenburgh, research director for the non-profit advocacy group Coin Center; and Robert Rosenblum, a partner at Wilson Sonsini Goodrich and Rosati.

The degree of legal expertise tapped for the panel suggests that the discussion is likely to revolve around regulatory topics, especially on the question of classifying some tokens as securities.

Latest Congressional foray

The hearing represents the latest significant gathering of U.S. lawmakers around the topic of cryptocurrencies, coming over a month after the U.S. Senate Banking, Housing and Urban Affairs Committee heard from the leaders of both the SEC and the Commodity Futures Trading Commission (SEC) in early February.

That event notably saw both the SEC’s Jay Clayton and the CFTC’s J. Christopher Giancarlo suggest that their respective agencies may one day come to Congress in an effort to see their jurisdictions extended to cover more of the cryptocurrency market. That said, both agency chiefs indicated that they want to provide an accommodative environment for the tech – but not at the expense of investor protection and enforcement against potential scams.

“We owe it to this new generation to respect their enthusiasm for virtual currencies, with a thoughtful and balanced response, and not a dismissive one,” Giancarlo remarked at the time.

Congress also has several bills related to cryptocurrencies, and while the long-term success of those measures isn’t certain in a politically-charged environment, Wednesday’s discussion may ultimately come into play as lawmakers look at proposals to beef up federal-level oversight of exchanges and study the link between cryptocurrencies and terrorism financing.

In the days following the Senate hearing in February, two House subcommittees held a hearing on blockchain, which, while it largely veered away from the topic of regulation, served as a platform for lawmakers to learn more about the technology.

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.