Leading Democrat asks Gensler, Yellen for thoughts on Republican-led crypto bill

Securities and Exchange Commission Chair Gary Gensler and Treasury Department Secretary Janet Yellen have both been called to provide analysis on a Republican-led digital asset market structure bill set for a committee vote in the coming weeks. 

House Financial Services Committee leading Democrat Maxine Waters sent letters to the pair, according to a statement released on Monday, urging them to share their thoughts on the Digital Asset Market Structure Discussion Draft. 

Waters asked Gensler how the legislation would impact the SEC’s current authorities. 

“Moreover, if there are recommendations or changes to existing law outside the scope of the bill that you believe would protect investors within the digital assets space, I would welcome those views as well,” Waters said in her letter to Gensler sent on June 23. 

Pathway to commodity status

House Financial Services Committee Chair Patrick McHenry, R-N.C, and House Agriculture Committee Chair Glenn ‘G.T.’ Thompson, R-Pa., proposed the draft bill earlier this month. It seeks to provide a pathway for a digital token to transfer from being treated as a security to a commodity.

Waters has previously said she was concerned about consumer protections in the bill. 

Waters also asked both Yellen and Gensler "to be prepared to brief House Financial Services Committee Members on your views and recommendations, following the submission of your written response to this letter." Waters said responses are due by June 30. 

Gensler has said existing rules already regulate crypto and that new legislation is not needed. Meanwhile, Yellen said earlier this month that she wants Congress to pass additional crypto regulation, saying she sees some "holes in the system."

Concern from Democrats

Republicans and Democrats in the House Financial Services committee have shown some divides on the bill, and Waters argued at a hearing this month that the bill could hinder SEC efforts. 

"The bill appears to halt any enforcement actions by the SEC against crypto firms, even when they have committed fraud," Waters said on June 13. "This provisional registration could reward bad actors with a 'get out jail free' card and allow them to continue harming consumers and investors."

McHenry has said he plans to hold a committee session to vote on the legislation in the second week of July.