French Hill of Arkansas will likely chair the Subcommittee on Digital Assets and Financial Technology. Hill was also appointed vice chair of the broader committee. He stated that a bipartisan effort is needed for “FinTech innovation to flourish safely and effectively in the United States.”
The concern of regulating the crypto industry became a requisite after the collapse of the crypto exchange FTX in November. Sam Bankman-Fried, FTX’s founder, was arrested last month on fraud charges and released on a $250 million bond while he awaits trial. The fraud cases of American entrepreneurs remind the need to regulate the crypto industry.
Hill has always been a great supporter of crypto assets.in addition, in 2021, he co-sponsored the Central Bank Digital Currency (CBDC) Study Act. He said it’s “important for the Federal Reserve to not delay its important work” on a potential CBDC.
In 2019, Hill wrote a letter to the IRS urging it to reconsider its tax guidance for cryptocurrency holders. “Ambiguity impedes appropriate tax compliance,” the letter says.
“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,” Hill said.
However, Bankman-Fried was operating out of the Bahamas and was a skilled Washington operative, forging relationships with Maxine Waters (D-Calif.) and Rostin Benham, chairman of the Commodity Futures Trading Commission. In addition, during the 2022 midterm elections, Bankman-Fried funded $40 million publicly, mostly to Democrats. In addition, he and his associates donated to politicians on both sides of the aisle.
Federal Bank regulators have alleged that Bankman-Fried violated criminal campaign finance laws while committing an $8 billion scam.
FTX’s collapse and Bankman-Fried’s imputation gave Republicans a chance to question and criticize the work of Federal regulators.
Emmer described actions taken by Securities and Exchange Commission Chair Gary Gensler as “haphazard and unfocused.”
The SEC has ramped up its actions since FTX spiraled into bankruptcy. For example, on the day Hill announced the subcommittee, the commission charged crypto lender Genesis and crypto exchange Gemini with the unregistered sale and offering of securities.