Crypto Execs, Senators Want Less Regulation

Cryptocurrency executives and at least two U.S. Senators who own bitcoin may be on the same page when it comes to regulations: keep them to the minimum.  

In December, six crypto executives testified at a hearing before the U.S. House Committee on Financial Services.

Two members of the powerful Senate Banking Committee, who listened to the testimony and will have a hand in regulating cryptocurrency, own the digital assets.  

See also: Six Crypto Execs Warn Congress Not to Overregulate Crypto

A Wall Street Journal analysis of public financial records revealed Sen. Cynthia Lummis owns $250,000 in bitcoin. That makes the Wyoming Republican, who has been a proponent for the currency, the most heavily invested member of Congress in the asset, the report said. She has accepted bitcoin contributions, and Wyoming has passed several crypto-friendly laws.

Sen. Pat Toomey (R-Pa.) has a smaller share in the industry.  

Lummis and Toomey are the only two senators with such investments, the WSJ concluded following a review of financial disclosures. They argue their familiarity of cryptocurrency will help them craft legislation. 

Lummis reportedly plans to lobby fellow members of Congress to emulate Wyoming’s hands-off approach toward regulating crypto, which has led crypto exchange Kraken and blockchain platform Cardano to move their headquarters to the state. In addition to exempting digital currencies from property taxes, and systematizing regulatory language, Wyoming has encouraged crypto miners to use natural gas that’s an unwanted byproduct of oil drilling to power their energy-intensive activity. 

Read more: Sen Lummis’ Christmas Present to Crypto: Clear Regulation in the New Year

In testimony on Capitol Hill, crypto execs said such a hands-off approach works for them. 

Circle CEO Jeremy Allaire said as many as 20 million people in the U.S. and 200 million around the world participate in the digital asset market. 

He cautioned that not all digital payment instruments are created equal. But, by the same token, “not all of them are part of an unregulated Wild West as has been often portrayed,” he added. 

Allaire noted that any policy framework must support an “open and competitive playing field and allow new technologies to flourish.”

Brian Brooks, CEO of the Bitfury Group, testified that a national policy agenda that takes crypto compliance seriously should assess whether it makes more sense to continue to keep crypto activities out of the regulated financial system or bring them inside the system so they can be supervised and operated with appropriate levels of risk management. 

Alesia Jeanne Haas, CEO of Coinbase and CFO of Coinbase’s U.S. subsidiary, warned that without legislation that are debated with public participation, the U.S. risks unnecessarily onerous and chilling laws and regulations. 

But not everyone agrees a light touch on crypto regulations is the solution. Some argue it is inappropriate for elected officials that hold these personal investments to determine the new rules. 

Lee Reiners, a former official at the Federal Reserve Bank of New York, said considering these two senators are advocating favorable cryptocurrency regulation, it is fair to question their conflict of interest. 

Rep. Alexandria Ocasio-Cortez, the New York Democrat who sits on the House Financial Services Committee, said on Instagram that members of Congress should not have individual stocks or cryptocurrency assets. 

“Because we have access to sensitive information and upcoming policy, I do not believe members of Congress should hold/trade individual stock, and I choose not to hold any so I can remain impartial about policy marking,” she said. “I also extend that to digital assets/currencies, especially because I sit on the Financial Services Committee. So, the answer is no, because I want to do my job as ethically and impartially as I can.”  

Sen. Elizabeth Warren (D-Mass.) has introduced tighter ethics rules that would prohibit members of Congress and other federal officials from holding or trading stock or other assets that may be influenced by their agency, department or actions. 

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