Rep. Maxine Waters calls for informational sessions for US lawmakers on crypto-related issues

U.S. Rep. Maxine Waters, D-Calif., known for being a crypto critic, said she wants to organize a group of lawmakers to take a deeper dive into firms that operate in the industry and study how they should be overseen. 

"I would like to try and organize small groups of Congress to be able to ask more questions and get more involved in what is really going on with some of these companies," Waters said on Tuesday at a House Financial Services Committee panel focused on digital assets. 

Her latest statements come as some lawmakers, led by Republicans, are pushing for legislation to regulate crypto. Ranking Democrat Waters has previously cited Securities and Exchange Commission Chair Gary Gensler, who has said the door is always open for crypto firms to register with the agency, in her rebuttal against a Republican-led market structure bill. House Financial Services Committee Chair Patrick T. McHenry, R-N.C., who just announced his retirement, has been a key lead in advancing crypto legislation. 

During Tuesday's hearing, Waters asked the SEC's Valerie Szczepanik, who is the director of the agency's Strategic Hub for Innovation and Financial Technology (FinHub), about a potential session. 

"I'm going to ask what could be a sensitive question, but I'd hope you would try and help me with this, these crypto companies are coming to Congress and to members of Congress, some members of Congress are truly interested in the role that crypto is going to play in the world and particularly in the United States," Waters said. 

Waters then asked if the SEC would consider holding some "special sessions with members of Congress to talk about the problems and the pitfalls that may occur and give some information that would help them not to believe that somehow they should be advancing or even advocating because maybe they just don't know enough."

Szczepanik said lawmakers should reach out to the SEC. 

Reuters reported on Tuesday that the crypto industry has hit a new record for federal lobbying spending. Crypto companies spent almost $19 million in the first three quarters of 2023 on lobbying, up from $16 million during the space period in 2022. 

Clarity issues

Majority Whip Tom Emmer, R-Minn., grilled the SEC's Szczepanik over her review of a now infamous speech where the SEC's former corporation finance director argued that digital assets with "sufficiently decentralized" networks, such as Ethereum, don't fit under the umbrella of securities.

"When reviewing a draft you said that providing, quote, less detail in the speech was better because the concept of a token morphing from a security to a non-security was a new concept and would generate a lot of discussion," Emmer said. "Do I have that correct?"

Szczepanik confirmed her comment but declined to comment on whether ether is a security. SEC Chair Gensler has also declined in the past to answer directly whether ether is a security or not.