After a rough year for the crypto market, Republican lawmakers announced on Thursday, Jan. 12, the creation of a special subcommittee to monitor and regulate the crypto and fintech sectors, as reported first by CNBC.
Arkansas congressman French Hill will lead the Subcommittee on Digital Assets, Financial Technology, and Inclusion as part of the House Financial Services Committee.
US Attorney for the Southern District of New York, Damian Williams, holds a press conference to announce the indictment of Samuel Bankman-Fried, founder of the now-bankrupt FTX cryptocurrency exchange, in New York, on December 13, 2022.
Major Technological Advancement
The lawmaker was also appointed as the vice chair of the committee. He argued that a bipartisan effort is required to ensure that the FinTech sector will thrive safely in the country.
"At a time of major technological advancement and change in the financial sector, it is our job to work across the aisle and promote responsible innovation while encouraging FinTech innovation to flourish safely and effectively in the United States," Rep. Hill said in a statement.
Following the stunning collapse of crypto giant FTX in November 2022 and other bankruptcies in the market, lawmakers have since discussed their plans to regulate the crypto industry.
FTX's former CEO, Sam Bankman-Fried, was arrested last month over fraud charges and is now awaiting trial.
CNBC notes that Hill has been a fervent advocate for the cryptocurrency sector. He co-sponsored the Central Bank Digital Currency (CBDC) Study Act in 2021 and argued back then that the Federal Reserve should immediately work on a CBDC to monitor the market.
Hill also co-wrote a letter in 2019 encouraging the IRS to improve its tax advice for cryptocurrency users long before FTX became well-known.
Republican congressmen Tom Emmer of Minnesota and Cynthia Lummis of Wyoming have also advocated for the crypto real.
Bankman-Fried's Support of Democrats
Despite working out of the Bahamas, Bankman-Fried was a skillful Washington insider who developed connections with power players like Rostin Benham, head of the Commodity Futures Trading Commission, and Rep. Maxine Waters, a Democrat from California.
Bankman-Fried contributed about $40 million in publicly reported donations to Democrats in the 2022 midterm elections.
Now, the former CEO is accused by federal officials of committing illegal campaign financing violations while carrying out an $8 billion fraud.
The demise of FTX and the ensuing indictment of Bankman-Fried have given Republicans plenty of material to criticize the efforts of regulators, according to CNBC.
Senate Democrats have also made their own initiatives to control the cryptocurrency business and direct enforcement measures.
This new subcommittee will be in charge of "providing clear rules of the road among federal regulators for the digital asset ecosystem."
It is also tasked to craft policies that will expand the reach of financial technology to underserved areas. Lastly, it will determine appropriate practices and policies to establish "diversity and inclusion in the digital asset ecosystem."
Related Article: CES 2023: Can Crypto and Blockchain Encourage a Greener Future? Here Are a Few Initiatives to Combat Climate Crisis
