A leaked memo circulated to Democrat House financial services committee members has revealed the "key messages" lawmakers were told to stick to that could see almost all cryptocurrencies categorized as securities.
The memo, passed to committee members by the Democratic party ahead of Wednesday’s joint House hearing on crypto policy, was leaked by Fox Business reporter Eleanor Terrett on Twitter. "The problem isn’t ambiguity—it’s mass non-compliance with existing laws," the memo reads. "We can't invent new accommodating regulatory structures simply because crypto companies refuse to follow clear rules of the road."
The memo calls on Democrat lawmakers to push back on Republican claims "they are working to provide clarity to the markets by carving out space for the Commodity Futures Trading Commission (CFTC) in crypto" … "Republicans are proving that they really aren't serious about protecting investors and consumers."
Bipartisan Bill Targets El Salvador's Bitcoin Adoption
This week, a bipartisan bill from 2022 was reintroduced to Congress by lawmakers that would require U.S. federal agencies to report on El Salvador's cybersecurity and financial stability capabilities as part of efforts to fight using cryptocurrency as legal tender, claiming bitcoin could "weaken economic and financial stability and empower malign actors."
El Salvador became the world's first country to make Bitcoin legal tender in 2021, with the country's president Nayib Bukele buying almost 2,400 Bitcoins as part of a plan to make this crypto a core part of the country's economy.
"Given U.S. interest in prosperity and transparency in Central America, we must seek greater clarity on how the adoption of bitcoin as legal tender may impact El Salvador’s financial and economic stability, as well as El Salvador’s capacity to effectively combat money laundering and illicit finances," Jim Risch, a Republican from Idaho who announced the legislation, told the Washington Examiner.
Crypto Industry Reacts To U.S. Regulatory Moves
Bitcoin, Ethereum, and the crypto industry have broadly criticized the memo and the bill.
"Bizarre that they put something so blatantly illegal in writing," Ari Paul, the chief investment officer of BlockTower Capital, posted to Twitter. "The SEC has no authority to determine what is and isn't a security under law. For them to do so would be a violation of the laws governing their operation."
"Never in my wildest dreams would I have thought that the U.S. government would be afraid of what we are doing here," Bukele posted to Twitter last year when the bill was first introduced.
The U.S. crypto regulation debate is likely to continue as more countries adopt cryptocurrencies and blockchain technology.