The chief executives of six major cryptocurrency companies made their Washington debut on Wednesday, broadly embracing regulation amid explosive growth in digital currencies — even as they pushed back against the idea that old securities laws will work in the emerging space.
Testifying before the House Financial Services Committee for nearly five hours, executives from Coinbase, Circle, FTX, Bitfury, Paxos, and Stellar Development Foundation fielded questions from lawmakers on understanding the crypto space, ransomware, how to protect investors against losses and fraud, and providing services for the unbanked.
Amid polite but skeptical questioning, many of the executives voiced support for a new regulatory framework, rather than using existing banking laws to regulate the crypto space. Their appearance in Congress comes as regulators and lawmakers look to craft new rules for digital assets.
“The solution is not to shoehorn digital asset operations into a regulatory system designed for earlier generations of financial assets,” Paxos CEO Charles Cascarilla told lawmakers.
Cascarilla also suggested if policy makers gave non-bank crypto platforms direct access to the Federal Reserve, like the Bank of England does to non-bank payment service providers, it would open up the sector to more consumers, and lower costs by cutting out financial middle men.
Brian Brooks, former Comptroller of the Currency under former President Donald Trump who now serves as CEO of Bitcoin mining firm Bitfury Group, questioned what he called hypocrisy within the regulatory system.
“Is it consistent to take the position that only banks should be allowed to issue stablecoins, but then fail to grant bank charters to the largest issuers of stablecoins?” Brooks pointed out.
“Does it make sense to bring enforcement actions challenging certain crypto assets as unregistered securities, but then fail to allow those assets to be registered and trade on...