Congressman McHenry says regulators are overstepping their bounds in the absence of crypto legislation

The leading Republican on the House Financial Services Committee has written to the committee chair to call for more crypto legislation. 

In a January 24 letter to Maxine Waters (D-CA), Patrick McHenry (R-NC) wrote of rules for crypto: “We should not cede these important issues to regulators such as SEC or CFTC, or to the judicial branch, to determine. This Committee should do its work to appropriately categorize these assets and determine the rules that will govern their use.”

McHenry went on to write:

“While both Chairmen Benham and Gensler have been extremely vocal, neither the Commodity Futures Trading Commission
(CFTC) nor the Securities and Exchange Commission (SEC) positions on digital assets is based in statute. U.S.-based trading platforms are not currently under the direct jurisdiction of either the SEC or CFTC. The Committee should further examine whether increased federal regulation of cryptocurrency trading platforms is necessary or appropriate.”

The battle over the classification of digital assets has been ongoing for years, but the Biden administration’s regulators have been especially assertive. SEC chair Gary Gensler has forcefully pushed to regulate crypto exchanges as securities exchanges. The recently-confirmed CFTC chair Rostin Behnam, meanwhile, has asked Congress to make the agency the primary cop on the beat. Both commissions have also pushed to have their budgets increased after extensive cuts under the Trump administration.

While many in the crypto industry may like McHenry’s sentiment of restraint at these agencies, legislation that addresses crypto directly has floundered in nearly all cases. Many of the main figures in crypto lobbying are have also pushed back against the need for new laws as a whole.