America on "Fire": Will the Crypto Frenzy Lead to Financial Independence and Early Retirement or Financial Ruin?, House hearing transcript (June 30, 2021), GovInfo CHRG-117hhrg45360, PDF
Summary
This June 30, 2021 hybrid hearing of the House Financial Services Subcommittee on Oversight and Investigations, chaired by Al Green, took its title from FIRE, which Green explained is an acronym for financial independence/retire early. The witnesses were Eva Su of the Congressional Research Service, Alexis Goldstein of the Open Markets Institute, Christine Parker of Reed Smith LLP, Sarah Hammer of the Wharton School and Peter Van Valkenburgh of Coin Center. The printed hearing (Serial No. 117–35) adds their prepared statements, a Wall Street Journal article submitted by Rep. Brad Sherman on bitcoin miners and old fossil-fuel power plants, and Van Valkenburgh's written answers to questions from Representatives Davidson and Emmer.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Full text
AMERICA ON ‘‘FIRE’’: WILL THE CRYPTO
FRENZY LEAD TO FINANCIAL INDEPENDENCE
AND EARLY RETIREMENT OR FINANCIAL RUIN?
HYBRID HEARING
BEFORE THE
SUBCOMMITTEE ON OVERSIGHT
AND INVESTIGATIONS
OF THE
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
JUNE 30, 2021
Printed for the use of the Committee on Financial Services
Serial No. 117–35
(
U.S. GOVERNMENT PUBLISHING OFFICE
45–360 PDF WASHINGTON : 2021
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HOUSE COMMITTEE ON FINANCIAL SERVICES
MAXINE WATERS, California, Chairwoman
CAROLYN B. MALONEY, New York PATRICK MCHENRY, North Carolina,
NYDIA M. VELÁZQUEZ, New York Ranking Member
BRAD SHERMAN, California FRANK D. LUCAS, Oklahoma
GREGORY W. MEEKS, New York PETE SESSIONS, Texas
DAVID SCOTT, Georgia BILL POSEY, Florida
AL GREEN, Texas BLAINE LUETKEMEYER, Missouri
EMANUEL CLEAVER, Missouri BILL HUIZENGA, Michigan
ED PERLMUTTER, Colorado ANN WAGNER, Missouri
JIM A. HIMES, Connecticut ANDY BARR, Kentucky
BILL FOSTER, Illinois ROGER WILLIAMS, Texas
JOYCE BEATTY, Ohio FRENCH HILL, Arkansas
JUAN VARGAS, California TOM EMMER, Minnesota
JOSH GOTTHEIMER, New Jersey LEE M. ZELDIN, New York
VICENTE GONZALEZ, Texas BARRY LOUDERMILK, Georgia
AL LAWSON, Florida ALEXANDER X. MOONEY, West Virginia
MICHAEL SAN NICOLAS, Guam WARREN DAVIDSON, Ohio
CINDY AXNE, Iowa TED BUDD, North Carolina
SEAN CASTEN, Illinois DAVID KUSTOFF, Tennessee
AYANNA PRESSLEY, Massachusetts TREY HOLLINGSWORTH, Indiana
RITCHIE TORRES, New York ANTHONY GONZALEZ, Ohio
STEPHEN F. LYNCH, Massachusetts JOHN ROSE, Tennessee
ALMA ADAMS, North Carolina BRYAN STEIL, Wisconsin
RASHIDA TLAIB, Michigan LANCE GOODEN, Texas
MADELEINE DEAN, Pennsylvania WILLIAM TIMMONS, South Carolina
ALEXANDRIA OCASIO-CORTEZ, New York VAN TAYLOR, Texas
JESÚS ‘‘CHUY’’ GARCIA, Illinois
SYLVIA GARCIA, Texas
NIKEMA WILLIAMS, Georgia
JAKE AUCHINCLOSS, Massachusetts
CHARLA OUERTATANI, Staff Director
(II)
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SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS
AL GREEN, Texas Chairman
EMANUEL CLEAVER, Missouri TOM EMMER, Minnesota, Ranking Member
ALMA ADAMS, North Carolina BARRY LOUDERMILK, Georgia
RASHIDA TLAIB, Michigan ALEXANDER X. MOONEY, West Virginia
JESÚS ‘‘CHUY’’ GARCIA, Illinois DAVID KUSTOFF, Tennessee
SYLVIA GARCIA, Texas WILLIAM TIMMONS, South Carolina, Vice
NIKEMA WILLIAMS, Georgia Ranking Member
(III)
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CONTENTS
Page
Hearing held on:
June 30, 2021 .................................................................................................... 1
Appendix:
June 30, 2021 .................................................................................................... 37
WITNESSES
WEDNESDAY, JUNE 30, 2021
Goldstein, Alexis, Director, Financial Policy, Open Markets Institute ............... 6
Hammer, Sarah, Managing Director, Stevens Center for Innovation in Fi-
nance, The Wharton School, University of Pennsylvania ................................. 10
Parker, Christine, Partner, Reed Smith LLP ........................................................ 8
Su, Eva, Financial Economics Analyst, Congressional Research Service (CRS) 5
Van Valkenburgh, Peter, Director of Research, Coin Center ............................... 11
APPENDIX
Prepared statements:
Goldstein, Alexis ............................................................................................... 38
Hammer, Sarah ................................................................................................ 51
Parker, Christine .............................................................................................. 59
Su, Eva .............................................................................................................. 66
Van Valkenburgh, Peter .................................................................................. 79
ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD
Sherman, Hon. Brad:
Wall Street Journal article, ‘‘Bitcoin Miners Are Giving New Life to
Old Fossil-Fuel Power Plants’’ ..................................................................... 90
Van Valkenburgh, Peter:
Written responses to questions for the record from Representative David-
son .................................................................................................................. 96
Written responses to questions for the record from Representative
Emmer ........................................................................................................... 99
(V)
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AMERICA ON ‘‘FIRE’’: WILL
THE CRYPTO FRENZY LEAD
TO FINANCIAL INDEPENDENCE
AND EARLY RETIREMENT
OR FINANCIAL RUIN?
Wednesday, June 30, 2021
U.S. HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON OVERSIGHT
AND INVESTIGATIONS,
COMMITTEE ON FINANCIAL SERVICES,
Washington, D.C.
The subcommittee met, pursuant to notice, at 10:05 a.m., in room
2128, Rayburn House Office Building, Hon. Al Green [chairman of
the subcommittee] presiding.
Members present: Representatives Green, Adams, Tlaib, Garcia
of Illinois, Garcia of Texas, Williams of Georgia; Emmer,
Loudermilk, Mooney, Kustoff, and Timmons.
Ex officio present: Representative Waters.
Also present: Representatives Sherman, Davidson, and Gonzalez
of Ohio.
Chairman GREEN. Good morning, everyone. I am Congressman
Al Green, and it is my honor to call the Oversight and Investiga-
tions Subcommittee to order.
Without objection, the Chair is authorized to declare a recess of
the subcommittee at any time. Also, without objection, Members of
the full Financial Services Committee who are not members of this
subcommittee are authorized to participate in today’s hearing. And
I would like to note that Mr. Brad Sherman, who is a member of
the Full Committee, without objection will be accepted as a partici-
pant.
Today’s hearing is entitled, ‘‘America on ‘FIRE’:—‘FIRE’ being an
acronym for financial independence/retire early—Will the Crypto
Frenzy Lead to Financial Independence and Early Retirement or
Financial Ruin?’’
With the hybrid format of this hearing, we will have some mem-
bers and witnesses participating in person and others on the
Webex platform. I remind all Members participating remotely to
keep themselves muted when they are not being recognized by the
Chair. The staff has been instructed not to mute Members, except
when a Member is not being recognized by the Chair and there is
inadvertent background noise.
Members are also reminded that they may participate in only
one remote proceeding at a time. If you are participating remotely
(1)
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2
today, please keep your camera on, and if you choose to attend a
different remote proceeding, please turn your camera off.
I now recognize myself for 2 minutes to give an opening state-
ment.
It is my pleasure to open the second in a series of Financial Serv-
ices Committee hearings on issues related to cryptocurrency and
digital assets. Most of us in this room are old enough to remember
the financial calamities that cost so many, so much: the 2008 mort-
gage crisis; the Allen Stanford Ponzi scheme; and the Bernard
Madoff Ponzi scheme. In each of these cases, and in others that I
haven’t enumerated, investors and financial institutions suffered
severe losses, then sought and/or received bailouts from the Fed-
eral Treasury. Their refrain seems to have been, ‘‘Keep the govern-
ment out of my life until I lose money.’’
So today, we ask, will there be a bailout of digital asset investors
if their investments’ market value drops to zero? If we believe that
such is not the role of the Federal Government, should there be an
amount or form of reserves required to backstop digital securities
should they fail, or, instead, are today’s investors in digital assets
entirely reasonable in expecting the Federal Government to provide
a backstop in certain cryptocurrencies should these digital assets
become large enough to have a systemic impact on our economy?
If so, should there be greater Federal oversight and rating agencies
to evaluate the risk and performance of these digital assets?
Today’s hearing will consider the answers to these questions and
assess the systemic risk to the economy, as well as the risk of loss
to individual investors posed by recent periods of extreme volatility
in crypto assets that are not backed by any form of tangible collat-
eral.
It is now my pleasure to yield to the new ranking member of the
subcommittee, whom I must congratulate, the gentleman from
Minnesota, Mr. Emmer. And I do look forward to working with you.
Mr. EMMER. Thank you, Mr. Chairman. I, too, look forward to
working with you. I appreciate you holding this hearing today, and
I will give a big thank you to our witnesses for appearing before
the committee. I look forward to all of your testimony.
Financial technology and cryptocurrency are the future of the
global financial system. In general, Fintech lowers the barriers to
entry to the traditional financial system and offers all consumers,
no matter where they are, the ability to access convenient financial
services at low competitive costs.
Cryptocurrency is no exception, as we have seen from the huge
consumer demand for these innovative assets backed by technology
that is permissionless, open, and private. Cryptocurrency allows
people to transact with each other in real time across borders for
very little cost in a way that is so transparent and verifiable, that
it maintains more trust than traditional financial transactions with
a third-party intermediary.
Most importantly, cryptocurrency and blockchain technology
unlock access to opportunity. The open-source nature of these tech-
nologies offers millions of Americans the opportunity to study the
underlying code, develop blockchain projects, and launch their own
businesses, all without having to ask anyone for permission. That
is an incredible opportunity.
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Over the last few years, I have been fortunate to meet with many
great crypto and blockchain innovators. The common refrain during
our discussions is that they so badly want to develop their new
crypto and blockchain ideas right here in the United States, but
they don’t, because of continuing uncertainty with Federal regula-
tion and, perhaps more importantly, the lack of enforcement of ex-
isting laws and regulations. They are afraid to launch new projects
that, for example, might classify them to be a, ‘‘money transmitter,’’
even though their work has nothing to do with money trans-
mission.
Still, the thought of having to comply with an overly burdensome
State-based money transmission licensing system in the United
States is too much of a challenge for these entrepreneurs to be
worth their time and their investment, so they head overseas
where the regulatory compliance is more streamlined.
I have also been told by two co-founders of a company, who are
in the midst of developing a new blockchain network, that they
wanted to hire American developers, but because there isn’t a
streamlined process at the SEC to determine, what is a security,
they couldn’t pay American developers with their token. So, they
actually went out and hired a team of developers in Europe in-
stead, where they can confidently comply with existing regulation.
As I mentioned, Fintech and cryptocurrencies are the future of
finance, but we are missing out as a country because American en-
trepreneurs are still unsure of how to navigate our existing regu-
latory system. This means high-tech jobs are going overseas, and
capital formation opportunities for everyday Americans are being
missed, all part of the chilling effect that comes when we do not
answer the questions that industry leaders and consumers are beg-
ging for, questions like: what digital assets are a security; what
digital assets are a commodity; and what digital assets are a cur-
rency? Answering these questions will keep innovation here in
America and unlock new opportunities for every American to ac-
cess.
To conclude, let’s be clear that these things are already regu-
lated, but we need clarity in application and enforcement of the ex-
isting laws and regulations. There are also areas where we can and
should streamline our regulatory framework to ensure that we re-
alize and benefit from crypto investment and innovation right here
in the United States. I look forward to learning from the witnesses
how we can address these challenges, and I yield back the remain-
der of my time.
Chairman GREEN. The gentleman yields back. The Chair now
recognizes the gentleman from California, Mr. Sherman, who is
also the Chair of our Subcommittee on Investor Protection, Entre-
preneurship, and Capital Markets, for 1 minute for an opening
statement.
Mr. SHERMAN. Thank you so much for this time. Those in the
cryptocurrency space are naturally pro-crypto. Their fortunes, their
relevance, and their fame depends upon the success of
cryptocurrency. Cryptocurrency is something you can bet on, but if
people want to have the animal spirits to take risks, I would prefer
them to invest in equity markets to support the building of Amer-
ican companies, or the California lottery to support the schools in
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my State. Cryptocurrencies are highly volatile, so one person
makes a million dollars and retires at age 45 and loses $100,000,
Coinbase makes money, and one millionaire goes on TV and says
how wonderful it is, but nine others do not retire in dignity, but
instead become eligible for Medicaid.
Cryptocurrencies can ultimately be successful only if they are
successful currencies, and evading the Know Your Customer (KYC)
rule is the one thing the cryptocurrencies have as an advantage to
the U.S. dollar. Cryptocurrencies have the political support of the
patriotic anarchists who are rooting for tax evasion. I hope we shut
it down.
Chairman GREEN. The gentleman’s time has expired.
The Chair now recognizes the Chair of the full Financial Services
Committee, the gentlewoman from California, Chairwoman Waters,
for an opening statement.
Chairwoman WATERS. Thank you very much, Chairman Green.
Congress and regulators face many challenges as we grapple with
how to best regulate cryptocurrencies, including cryptocurrency
issuers, exchanges, and investments. This committee is committed
to providing not only more transparency in this minimally-regu-
lated industry, but to ensuring that appropriate safeguards are in
place, and so we have begun a thorough examination of this mar-
ketplace.
Today, I look forward to hearing from our panel about the risk
of fraud and market manipulation that can hurt retail investors
and regular consumers. Furthermore, I look forward to learning
about the systemic risk presented by hedge funds rushing to invest
in highly-volatile cryptocurrencies and cryptocurrency derivatives.
So, thank you, Chairman Green, for convening this hearing today,
and I yield back the balance of my time.
Chairman GREEN. Thank you, Madam Chairwoman.
The Chair now recognizes the Vice Chair of the subcommittee,
Representative Williams of Georgia, for 1 minute for her opening
statement.
Ms. WILLIAMS OF GEORGIA. Thank you, Mr. Chairman, and
thank you to all of our witnesses for joining us today for this crit-
ical conversation. Often in Congress, it is up to us to write the
rules of the road while the road is being built. This rings especially
true when we talk about the rapid development of digital assets.
We have to be sure that the legislative regulatory frameworks gov-
erning digital assets keep up with the pace of innovation. What is
at stake is ensuring that financial innovation is appropriately serv-
ing all of the people. The people of Georgia’s 5th District want fi-
nancial services that are responsible and help them improve their
lives, and it is our responsibility to make sure that any financial
innovations, including digital assets, meet that bar. I look forward
to our discussion today, Mr. Chairman, and I yield back the bal-
ance of my time.
Chairman GREEN. The gentlelady yields back, and thank you,
Ms. Williams. It is now my honor to welcome each of our witnesses,
and I am pleased to introduce our panel: Eva Su, a Financial Eco-
nomics Analyst for the Congressional Research Service; Alexis
Goldstein, the director of financial policy at the Open Markets In-
stitute; Christine Parker, a partner at Reed Smith LLP; Sarah
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Hammer, managing director of the Stevens Center for Innovation
in Finance at the Wharton School of the University of Pennsyl-
vania; and Peter Van Valkenburgh, the director of research at Coin
Center. Welcome to each of you, and thank you for being here
today.
The witnesses will be recognized for 5 minutes each to give an
oral presentation of their testimony. Once the witnesses have fin-
ished their testimony, each Member will have 5 minutes within
which to ask questions.
For the witnesses in the hearing room, on the table in front of
you is a timer that will indicate how much time you have left.
When you have 1 minute remaining, a yellow light will appear. I
will ask you to be mindful of the timer, and when the red light ap-
pears, to quickly wrap up your testimony so that we can be respect-
ful of both the other witnesses’ and the committee members’ time.
And without objection, your written statements will be made a part
of the record.
Ms. Su, you are now recognized for 5 minutes to give an oral
presentation of your testimony.
STATEMENT OF EVA SU, FINANCIAL ECONOMICS ANALYST,
CONGRESSIONAL RESEARCH SERVICE (CRS)
Ms. SU. Thank you. Chairman Green, Ranking Member Emmer,
and members of the subcommittee, thank you for the opportunity
to testify today. My name is Eva Su, and I am an analyst in finan-
cial economics at the Congressional Research Service (CRS), focus-
ing on capital markets and securities regulation. The CRS provides
Congress with analysis that is authoritative, confidential, objective,
and nonpartisan. Any arguments referenced in my written or oral
testimony are for the purposes of informing Congress, not to advo-
cate for a particular policy outcome.
In recent years, financial innovation in capital markets has fos-
tered a new asset class, digital assets, and introduced new forms
of fundraising and trading. Digital assets, which include
cryptocurrencies, crypto assets, or crypto tokens, among others, are
digital representations of value.
The current regulatory landscape for digital assets is perceived
by certain industry observers to be fragmented. Multiple agencies
apply different regulatory approaches to digital assets at the Fed-
eral and State levels, regardless of the terms used to describe dig-
ital assets. Depending on their characteristics, some digital assets
are subject to securities laws and the regulations that are designed
to protect investors and maintain fair, orderly, and efficient mar-
kets, and facilitate capital formation. Others, such as Bitcoin and
International Securities Services Association (ISSA), are not con-
sidered securities and, generally, not directly subject to those re-
quirements.
The Securities and Exchange Commission is the primary regu-
lator overseeing digital assets, securities offerings, sales, and in-
vestment activities. My testimony focuses on issues related to dig-
ital assets securities regulation.
Digital assets’ increasing presence in capital markets raises pol-
icy questions regarding whether changes to existing laws and regu-
lations are warranted, and if so, when such changes should hap-
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pen, what form they should take, and which agencies should take
the lead. The current innovative environment is not the regulatory
regime’s first encounter with changing technology. In the past,
some technological advancements have led to regulatory revamps,
whereas others were dealt with through the existing regime. Regu-
latory oversight generally strives to balance the need to foster fi-
nancial innovation with objectives to ensure market integrity and
investor protection as well.
In general, policymakers contending with major financial innova-
tions have historically focused on addressing risk concerns while
tailoring a regulatory framework that was flexible enough to ac-
commodate evolving technology.
Current developments that raise policy issues include, first, dig-
ital asset exchanges. Some industry observers perceive digital asset
trading platforms as functional equivalents to securities exchanges
in buying and selling digital assets. These platforms are not subject
to SEC regulation, potentially making them less transparent and
more susceptible to manipulation and fraud.
Second, digital asset custody. Custodians provide safekeeping of
financial assets. Digital assets present custody-related compliance
challenges because custodians face difficulties in recording owner-
ship, recovering lost assets, and providing audits, among other con-
siderations.
Third, digital asset exchange traded funds (ETFs) are pooled in-
vestment vehicles that gather and invest money from a variety of
investors. ETF shares can trade on securities exchanges like a
stock. The SEC has not yet approved any digital asset ETFs be-
cause of market manipulation and fraud concerns.
Fourth, stablecoin. Stablecoin is a digital asset designed to main-
tain a stable value by linking its value to another asset or a basket
of reserve assets, like Facebook Diem, formerly known as Libra and
Tether. In policy discussions, some suggest applying ETF regu-
latory frameworks to certain stablecoins. Others argue for more
disclosure of the underlying reserve assets to expose potential de-
ceptive activities.
That concludes my testimony. I look forward to your questions.
Thank you.
[The prepared statement of Ms. Su can be found on page 66 of
the appendix.]
Chairman GREEN. Thank you, Ms. Su.
Ms. Goldstein, you are now recognized for 5 minutes to give an
oral presentation of your testimony.
STATEMENT OF ALEXIS GOLDSTEIN, DIRECTOR, FINANCIAL
POLICY, OPEN MARKETS INSTITUTE
Ms. GOLDSTEIN. Chairman Green, Ranking Member Emmer, and
distinguished members of the subcommittee, thank you for inviting
me to testify today. I am the director of financial policy at the Open
Markets Institute, where my work focuses on financial regulation
and consumer protection. Previously, I worked as a computer pro-
grammer at Morgan Stanley in electronic trading, and at Merrill
Lynch and Deutsche Bank as a business analyst serving on the eq-
uity derivatives trading desks.
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Earlier this year, the blowup of a single-family fund, Archegos
Capital, led to $10 billion in bank losses after the firm’s bets on
about a dozen total return swaps imploded. Because these sorts of
derivatives aren’t currently reported to the Securities and Ex-
change Commission on Form 13F, banks and regulators alike were
entirely in the dark about Archegos’ positions until it blew up. The
extent of hedge fund and family involvement in cryptocurrencies
lives in a similar regulatory blind spot.
Chairwoman Waters, to her credit, has introduced discussion
draft legislation to try and address some of these concerns with
Form 13F, and I believe that Congress and regulators should also
consider requiring that hedge funds report their cryptocurrency po-
sitions on this form. If a majority of hedge funds with billions of
dollars in assets under management begin to hold significant posi-
tions in crypto, as certain surveys indicate they are interested in
doing, it may produce dire risks for financial systemic risk, and it
may induce future crises as volatile swings in the cryptocurrency
markets could lead to things like forced liquidations of their assets.
In addition to hedge funds, large, too-big-to-fail banks and Silicon
Valley venture capital firms are also a growing presence in crypto.
Venture capital firms have already invested $17 billion in crypto
firms so far this year, which is more than 3 times what they in-
vested in all of 2020. If you combine this with the fact that some
cryptocurrencies have a majority of their supply held by a very
small number of people, it raises concerns around concentration.
For example, as of February, the top 20 largest Dogecoin addresses
held half of the cryptocurrencies’ entire supply.
There are also broad investor and consumer protection concerns
in cryptocurrency that I have personally observed as a user of
crypto exchanges and DeFi platforms. In traditional financial mar-
kets, barring a serious liquidity crisis, if you buy something, you
can generally assume you can sell it back, especially with a stock.
But on DeFi protocols, like Uniswap and SushiSwap, anyone can
upload a new cryptocurrency token, and anyone can add a liquidity
pool for it, including malicious actors who design tokens that can
be bought but never sold. These so-called honeypot tokens are so
prevalent that some DeFi protocols include an explicit warning
about them on their website. Some crypto investors try to read the
smart contracts or code of new coins to look for common pitfalls
and avoid scams, but this is an extremely high bar for non-pro-
grammers.
Some of the more concerning areas I have seen in DeFi are on
platforms that offer derivatives. Frankly, it reminds me of the over-
the-counter derivatives marketplace before the Dodd-Frank Act—I
worked in as a banker in the late 2000s—with things like the U.S.-
based dYdX, OPEN, which offers options on cryptocurrency, and
Ribbon Finance, which offers structured products based on crypto.
Recently, CFTC Commissioner Dan Berkovitz said in his speech
that unregistered DeFi exchanges may not be legal under the Com-
modity Exchange Act.
I have also used a DeFi protocol called PancakeSwap, which
often advertises very eye-popping annual percentage rates in ex-
change for locking a pair of cryptocurrencies into the platform’s li-
quidity pools. Annual percentage rates (APRs) are probably not the
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right metric to attempt to use for what the crypto community calls
yield farming, as the rates can vary wildly even on a single day.
But just to give you one example, in early May, PancakeSwap
posted a tweet saying that you could get an over 100,000-percent
APR if you locked in your Dogecoin on PancakeSwap. They later
stated that special rate was only there for 13 days, which is ques-
tionable to use for an APR. Users complained that the rate offered
was nowhere near what they were advertising on Twitter, yet they
tweeted again the same day that, ‘‘The longer you wait, the less
free money you get.’’
I believe that Congress should continue to examine if there are
regulatory gaps that require new legislation in order to ensure con-
sumer and investor protection in crypto and avoid systemic risk.
Regulators should continue to monitor the space and ensure com-
pliance with existing laws. Thank you. I look forward to your ques-
tions.
[The prepared statement of Ms. Goldstein can be found on page
38 of the appendix.]
Chairman GREEN. Thank you, Ms. Goldstein.
Ms. Parker, you are now recognized for 5 minutes to give an oral
presentation of your testimony.
STATEMENT OF CHRISTINE PARKER, PARTNER, REED SMITH
LLP
Ms. PARKER. Thank you. Thank you, Chairman Green, Chair-
woman Waters, Ranking Member Emmer, and members of the sub-
committee for the opportunity to appear before you today, and
thank you to the subcommittee staff for their hard work in putting
together this hearing. My name is Christine Parker, and I am a
partner in the New York office of Reed Smith. I am actually joined
today by my colleague, Trevor Levine, who was kind enough to
brave the heat to come to D.C. with me.
My practice focuses on regulatory enforcement and transactional
matters related to commodities, derivatives, and digital assets. I
routinely advise both regulated and unregulated digital asset mar-
ket participants in connection with a number of different Federal
and State regulatory and prudential regimes.
At the outset, I want to note that there are a lot of use cases for
blockchain and digital ledger technology, for which cryptocurrency
serves as the fuel. I urge this subcommittee to engage with organi-
zations that are working at the grassroots level to establish indus-
try-sponsored, voluntary, self-regulatory associations for digital
asset and crypto markets on both a global basis and at the national
level, because I think there is a lot to be learned from them.
I also want to point out that if we are going to innovate how we
regulate these new markets, it really calls for a new kind of finan-
cial regulator. At a minimum, we need financial regulators that re-
flect the diversity of retail investors who are active or want to be-
come active in the crypto markets. As advocates for responsible in-
novation, I don’t think the crypto industry has been very good at
pushing forward diverse voices, but we can, and we should, and we
will do better on that front.
However, we are here today to talk about the retail investors
who are training in the crypto markets, and I know there has been
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a lot of focus on the recent volatility in these markets and what
does that mean for Congress, for the regulators, and for retail in-
vestors.
Just a quick point: The volatility in the crypto markets, I think,
is not solely attributed to their lack of regulation. I will point out
that crypto exchanges, such as Gemini and Coinbase, are not regu-
lated like the Chicago Mercantile Exchange or the New York Stock
Exchange, but they are regulated by the New York Department of
Financial Services as limited purpose trust banks. They are subject
to the same Anti-Money Laundering (AML) and Know Your Cus-
tomer (KYC) requirements as any other Federal- or State-regulated
bank, and the Commodity Futures Trading Commission (CFTC)
has anti-fraud and anti-manipulation authority over the purchase
or sale of Bitcoin in spot and forward trades on these trading mar-
kets, and has actively used that authority in this space.
Separately, volatility is not unique to the crypto markets. Last
April, the crude oil market went negative, and in February, natural
gas markets were incredibly volatile due to Winter Storm Uri.
And there are products that are offered on CFTC-regulated ex-
changes that are available to retail customers that are based on
market volatility, so some investors are actually seeking out assets
that are based on volatility on these very highly-regulated ex-
changes. That being said, the question that we are really grappling
with today is, how do we best protect retail customers who are ac-
tively trading in the crypto markets?
I think it is somewhat problematic to just sort of simply equate
the crypto markets with terrorism, tax evaders, and bad actors. Re-
alistically, every member of this subcommittee has a law-abiding
constituent who enjoys trading crypto, so what is in the best inter-
est of this constituent of yours who is trading crypto right now? Ac-
cess to crypto markets that operate under a clear regulatory frame-
work with both customer protection mandates and opportunities for
risk that are commensurate with the suitability of the investor is
necessary.
Right now, we have an absurd patchwork of regulatory regimes
at both the State and Federal level. We have regulation by enforce-
ment, interpretation, guidance, interpretive guidance, and public
statements from regulators. One regular trader says that a crypto
asset is a currency, another says it’s a security, and the outcome
of that is incredibly harmful to retail customers. This lack of clarity
stifles innovation in the U.S. and, frankly, drives retail customers
to foreign exchanges. So, how do we better regulate cryptos?
The CFTC and the SEC should be empowered by Congress to
move quickly to provide retail investors with a broader array of
regulated crypto products that are attractive to market partici-
pants, but come with the robust market oversight of these regu-
latory regimes. This should happen now.
First, Congress should direct the SEC to immediately create
clear, workable criteria as to which digital assets are securities
and, therefore, subject to U.S. securities laws and regulations.
Second, while regulators in New York and Wyoming, in par-
ticular, have been very crypto-forward regulators and will continue
to be leaders in this space, Congress needs to pass legislation to
provide for the Federal preemption of the current State-by-State li-
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10
censing requirements of the direct purchase and sale of
cryptocurrency. This will ensure that these transactions are subject
to the level of market oversight that we currently have in the fu-
tures and securities markets. The logical regulator here is the
Commodity Futures Trading Commission, but you must ensure
that you fully fund them so they can take on this mandate.
Thank you for the opportunity to speak today, and I look forward
to your questions.
[The prepared statement of Ms. Parker can be found on page 59
of the appendix.]
Chairman GREEN. Thank you, Ms. Parker.
Ms. Hammer, you are now recognized for 5 minutes to give an
oral presentation of your testimony.
STATEMENT OF SARAH HAMMER, MANAGING DIRECTOR, STE-
VENS CENTER FOR INNOVATION IN FINANCE, THE WHAR-
TON SCHOOL, UNIVERSITY OF PENNSYLVANIA
Ms. HAMMER. Chairman Green, Ranking Member Emmer, and
members of the subcommittee, thank you for the opportunity to tes-
tify today. My name is Sarah Hammer. I am managing director of
the Stevens Center for Innovation in Finance, and senior director
of the Alternative Investments Program at the Wharton School of
the University of Pennsylvania. I also oversee the Blockchain Lab-
oratory within the Stevens Center at Wharton. Additionally, I am
an adjunct professor of law at the University of Pennsylvania Law
School, where I teach an upper-level juris doctor course on financial
regulation.
Before I proceed, I would like to note that the views expressed
here today are my own and not the views of the Wharton School
or the University of Pennsylvania.
Blockchain is a shared immutable ledger that facilitates the re-
cording of transactions in a network. Today, blockchain technology
infiltrates and powers a myriad of institutions, functions, and as-
sets in the United States and globally. The use cases for blockchain
are too numerous to cover in detail here, but they include decen-
tralized finance, enterprise blockchain, cybersecurity enhance-
ments, and even addressing climate change.
The subject of today’s hearing is cryptocurrency. At the outset,
it is worth noting that there is no official public data source for
cryptocurrency prices, market size, or volatility. This lack of data
is a significant problem. However, unofficial data sources have esti-
mated that the total value of the cryptocurrency markets may ex-
ceed $2 trillion. Investors in cryptocurrency include retail, high-
net-worth, and institutional investors, such as private funds cor-
porations, and endowments. Retail investment in cryptocurrency
may give rise to particular concerns about investor protection,
given the possibility of fraud or business failure, the lack of disclo-
sure, and the high level of price volatility.
The Securities and Exchange Commission is charged with a tri-
partite mission of protecting investors; maintaining fair, orderly,
and efficient markets; and facilitating capital formation. At the
same time, the SEC faces challenges in applying capital markets
and securities regulations to cryptocurrency. Chief among these
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11
challenges is whether the SEC has the authority to regulate a par-
ticular instrument.
Currently, the SEC evaluates crypto sales through the lens of a
test known as the Howey test, which evaluates whether an instru-
ment qualifies as an investment contract for the purposes of the
Securities Act. While the SEC has applied securities regulation to
dozens of initial coin offerings based on the Howey test, there is
still a lack of clarity as to whether it applies to a number of crypto
transactions that currently do not comply with SEC registration
and disclosure obligations. In addition, a number of exchanges that
offer trading and crypto, including those that meet the definition
of a, ‘‘security,’’ do not register with the SEC. Given this, there is
a strong need to establish a clear, sufficient, and appropriate regu-
latory framework for cryptocurrency.
I turn now to the issue of systemic risk. As discussed, the value
of the cryptocurrency market is estimated to possibly exceed $2
trillion, and it is characterized by very high levels of price vola-
tility. Additionally, estimates are that more than 2,000 different
cryptocurrencies currently circulate globally. For context, estimates
of subprime debt prior to the great financial crisis are less than $1
trillion.
Moreover, since no official data source exists for crypto markets,
financial regulators are at a distinct disadvantage in evaluating
their regulatory options. Because of the infiltration of crypto into
so many institutions, functions, and assets, the potential risks
must be carefully evaluated in a coordinated fashion.
In light of the risks and considerations of crypto, a myriad of
agencies, States, and international standard-setting bodies are im-
plicated. Thus, a key question for regulation is, how should we pro-
ceed and in what forum?
Importantly, a government authority already exists that could
support the development of a clear, sufficient, and appropriate
framework for regulation of crypto. Established in 2010 by the
Dodd-Frank Act, the Financial Stability Oversight Council (FSOC)
is the appropriate forum to engage in evaluating and addressing
potential systemic risks, convening and coordinating Federal rule-
making on issues that touch multiple agency jurisdictions, and con-
sulting with State and foreign regulatory authorities. I believe that
by leveraging the authorities of the FSOC to support the develop-
ment of a clear, sufficient, and appropriate framework for crypto,
we can address concerns about fostering innovation, providing con-
sistency, establishing global reach, and balancing our regulatory
objectives. Thank you.
[The prepared statement of Ms. Hammer can be found on page
51 of the appendix.]
Chairman GREEN. Thank you, Ms. Hammer.
Mr. Van Valkenburgh, you are now recognized for 5 minutes to
give an oral presentation of your testimony.
STATEMENT OF PETER VAN VALKENBURGH, DIRECTOR OF
RESEARCH, COIN CENTER
Mr. VAN VALKENBURGH. Chairman Green, Ranking Member
Emmer, members of the subcommittee, thank you for the invitation
to speak with you today. My name is Peter Van Valkenburgh. I am
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the director of research at Coin Center, which is an independent
nonprofit that is focused on cryptocurrency public policy.
The Bitcoin network has been processing transactions for longer
than Uber has been offering rides. Bitcoin and other
cryptocurrencies have enabled 3.1 billion transactions in the last 10
years, securing over $2 trillion in value. If cryptocurrencies were
unregulated to this day, would that not be an incredible failure of
our regulatory system?
As I will outline, it is not a failure, because over the last 10
years, cryptocurrencies have been regulated. Some of that regula-
tion, of course, does come from the technology itself. The scarcity
of Bitcoin, a total supply of only 21 million, is not preserved by the
goodwill and honesty of the participants on the network. It is se-
cured by a transparent, peer-to-peer accounting technology, a pub-
lic blockchain that makes fraud trivially cheap to detect and ab-
surdly expensive to commit.
But much regulation has also come from the Federal and State
Governments. The onramps and offramps where people buy and
sell Bitcoins for dollars and safekeep them are heavily regulated.
They are State license money transmitters or else they are char-
tered banks and trust companies. Before offering any services to
Americans, they must prove minimum capital requirements, post
bonds, and open their doors to yearly examinations. They are also
classified as financial institutions under the Bank Secrecy Act.
They must register with the Financial Crimes Enforcement Net-
work (FinCEN), know their customers, and share the details of sus-
picious activities with law enforcement.
Cryptocurrencies like Bitcoin and Ethereum are commodities, but
many crypto assets meet the flexible definition of an, ‘‘investment
contract,’’ and are, therefore, securities, which means their
issuance and their trading are regulated by the SEC.
Cryptocurrency derivatives are regulated by the CFTC. Finally,
anyone who markets a cryptocurrency service or tool that is decep-
tive or fraudulent is liable under various laws enforced by the
CFPB, the FTC, the SEC, the CFTC, and State attorneys general.
And the results of all of this regulation speak for themselves. In
2020, only 0.34 percent of all cryptocurrency transaction volume in-
volved a criminal sender or recipient. Despite several high-profile
hacks of overseas exchanges, no American exchange has suffered a
substantial hack or loss of consumer funds. Operators of money
laundering exchanges overseas have been arrested, sales of unreg-
istered tokenized securities have been targeted by SEC enforce-
ment, and criminal ransomware rings have had their servers seized
and their ransoms recovered. All of this has happened by sensibly
applying existing laws to the cryptocurrency space. We don’t need
new regulations.
And all of this has also happened while preserving the funda-
mental value of cryptocurrencies as open access platforms for fi-
nancial services and innovation. Unlike any other transactions
technology that works online, an open blockchain network is acces-
sible to people that banks and tech companies would rather ignore
than serve. With the rise of central bank digital currencies from
authoritarian nations happening in tandem with the rise of Bitcoin,
we are at a decision point as an advanced technological society. Are
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13
we willing to accept some risks if it means we can eliminate the
choke points to economic participation that further inequality and
stifle innovation, or would we prefer to strengthen those choke
points and outlaw alternatives in the hopes that a powerful elite
will smartly choose who should and should not have access to pow-
erful tools and volatile markets?
For every transaction that we want blocked, there is another
transaction we should celebrate for being unstoppable. Yes, there
are some criminals making payments on the Bitcoin network be-
cause banks won’t bank them. There are also pro-democracy activ-
ists in Belarus and anti-police violence protesters in Nigeria taking
donations on the Bitcoin network because local banks won’t bank
them. Nonprofits like Bisol and the Feminist Coalition in Nigeria
raised millions of dollars in Bitcoin donations last year, donations
they were forbidden from accepting by a corrupt or otherwise
uncaring banking sector in their respective countries.
In America, we don’t always agree, but no matter what, we are
tolerant and expect everyone to have the opportunity to stand up
and fight for their own vision of the good. Crypto innovation em-
bodies that aspiration. It is rough around the edges but holds some
values above all: every node is an equal; no one’s voice should be
censored; and work, rather than privilege, is what counts in con-
sensus. Thank you.
[The prepared statement of Mr. Van Valkenburgh can be found
on page 79 of the appendix.]
Chairman GREEN. Thank you, Mr. Van Valkenburgh.
I now recognize the Chair of the Full Committee, the gentle-
woman from California, Chairwoman Waters, for 5 minutes for
questions.
Chairwoman WATERS. Thank you very much, Mr. Green. Ms.
Goldstein, earlier this year, PricewaterhouseCoopers released their
third annual survey of hedge funds in the cryptocurrency market.
According to the survey, cryptocurrency currently accounts for 10
to 20 percent of all assets under management for 1 in 7 hedge
funds. Over 60 percent of the hedge funds surveyed expressed a de-
sire to start investing in cryptocurrencies or to accelerate their ex-
isting investments in cryptocurrencies by the end of 2021. Hedge
funds often manage funds on behalf of mutual funds, pension
plans, and other institutional investors which affect millions of reg-
ular consumers and investors.
Ms. Goldstein, do you see any systemic risks associated with
hedge funds investing heavily in cryptocurrencies? And I am more
interested in this, having just listened to the last presenter who
talked about the choke point that we should not be so concerned
about. What do you think?
Ms. GOLDSTEIN. Thank you, Chairwoman Waters, for the ques-
tion. I am very concerned about the presence of hedge funds and
cryptocurrency. I think we have seen with the Archegos meltdown
this year that when banks have prime broker relationships with
hedge funds or family funds, as Archegos was, who are doing risky
things, it can redound to the taxpayer-backed financial system.
Credit Suisse lost billions of dollars. All of the banks lost some $10
billion. If hedge funds get further into crypto, they don’t care about
direction. They will go long. They will go short. They can use lever-
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age. There are lots of cryptocurrency exchanges like FTX, and
Binance, and many others that allow people to use insane amounts
of leverage, 100 times to 1, and hedge funds are the perfect client
to use those sorts of leverage.
So what happens if a huge number of hedge funds, who have
prime broker relationships with too-big-to-fail banks, all happen to
be in similar crypto positions, whether it is long or short, and there
is massive volatility in the market? They may have to sell some of
their other assets. It may lead to margin calls in their non-crypto
assets, which could lead to forced liquidations and sort of redound
to the banks themselves in the form of counterparty risks. So, I
think—
Chairwoman WATERS. Let me ask you, are there any reporting
requirements hedge funds must comply with that would provide
regulators and the general public more transparency regarding
which hedge funds are most heavily invested in cryptocurrencies,
and which of these institutional investor counterparties may also
be exposed to potential risk?
Ms. GOLDSTEIN. Madam Chairwoman, there are not, to my
knowledge, because cryptocurrency is not currently reported on the
Form 13F. It is not seen as an ownership interest, so regulators are
essentially totally in the dark about what hedge funds’
cryptocurrency positions are, and, I suppose, have to rely on the fi-
nancial press or trying to figure out, based on the transactions on
the blockchain and de-anonymize certain addresses and figure out
who are the hedge funds. But there is no formalized way for regu-
lators to know how much hedge funds are in crypto.
Chairwoman WATERS. Ms. Hammer, you just spoke to this issue
somewhat. Would you give me your knowledge about what kind of
oversight do we have now, what agencies have, what responsibility,
and what should we have?
Ms. HAMMER. Chairwoman Waters, thank you for your question.
I, too, have concerns about crypto trading by private funds, and one
of the key issues, as I discussed in my opening statement, is trans-
parency and the availability of data. In the crypto markets, we
have no official public source for data. Investors are operating
based on online websites. There are sometimes disparities over
prices and interpretations of what volatility may be.
And in some ways, it harkens back to credit default swaps prior
to the great financial crisis. That was a market that was traded al-
most exclusively over-the-counter and highly unregulated. When
the great financial crisis hit, we saw that credit default swaps ex-
acerbated the risks, but once we regulated them and instituted cen-
tral clearing counterparties, we had an official data source and an
oversight regulator such that we could identify where the risks lay.
I think the same is true for crypto.
And, as Ms. Goldstein said, the issues related to leverage and
whether it is appropriate or not for some of these assets are ex-
tremely important. I do believe that, at a high level, the authority
of the FSOC to convene, to coordinate the regulators is crucial be-
cause we are talking not just about markets issues or private fund
issues. We are talking about crypto within banks. We are talking
about crypto within insurance companies and other non-banks, and
that can implicate taxpayer dollars in a number of different ways.
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So, in our system, the FSOC can convene to coordinate those au-
thorities to work together.
Chairwoman WATERS. Thank you very much. I yield back the
balance of my time.
Chairman GREEN. The gentlelady yields back.
The Chair now recognizes the ranking member of the sub-
committee, the gentleman from Minnesota, Mr. Emmer, who also
serves on our FinTech Task Force, for 5 minutes.
Mr. EMMER. Thank you, Mr. Chairman. This is interesting fol-
lowing on the testimony, the questions we just heard. Mr. Van
Valkenburgh, let’s start with this idea that there is a need for reg-
ulation. When people promise investors wild profits from proposed
new digital tokens in an initial offering, is that regulated?
Mr. VAN VALKENBURGH. A promise of future profits reliance on
the issuer’s efforts is basically the Howey test. It is how we classify
things as investment contracts, and so the SEC would probably
treat those offerings in all cases as securities. They regulate
issuance and trading.
Mr. EMMER. Let me keep going. I want to come back to that one,
because I want to talk about what the SEC would probably do and
why that is a problem. When people make bets, again, Mr. Van
Valkenburgh, on the future price of cryptocurrencies or trade with
leverage, as we heard referenced, is that regulated?
Mr. VAN VALKENBURGH. That is on the future price of an under-
lying commodity of swaps or futures. These are commodities de-
rivatives, and the CFTC has jurisdiction over that kind of trade
and those markets.
Mr. EMMER. So, yes, it is regulated.
Mr. VAN VALKENBURGH. Yes.
Mr. EMMER. Can companies sell and transmit—and this probably
goes to the first bit of testimony—cryptocurrency without identi-
fying their customers? Is that regulated?
Mr. VAN VALKENBURGH. That is heavily regulated, and while
Representative Sherman said that the one advantage of this is
avoiding KYC, I have to argue that every U.S. exchange is Bank
Secrecy Act (BSA)-regulated. They have to know their customers,
and file suspicious activity reports, and this has been the case since
at least 2013.
Mr. EMMER. So, the prices of cryptocurrencies, like Dogecoin,
have been quite volatile and seemingly susceptible to influence by
statements from persons and groups, maybe even manipulated, as
was suggested by one of the opening statements here today. Is that
regulated, Mr. Van Valkenburgh?
Mr. VAN VALKENBURGH. As an open source, open network
cryptocurrency, Dogecoin likely does not qualify as a security. To
the extent that line is unclear, Congressman Emmer, you intro-
duced excellent legislation last Congress that was bipartisan and
co-sponsored by Representatives Soto and Khanna, that would help
clearly delineate that line between securities and commodities. But
if we assume today that Dogecoin is a commodity, it is still a regu-
lated commodity for various purposes. Specifically, in the manipu-
lation context that you raised, the CFTC has the duty to inves-
tigate and prosecute manipulation, including at commodity spot
markets under their Commodity Exchange Act (CEA) authority,
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Section 6(c)(1), which the Dodd-Frank Act added to the Commodity
Exchange Act.
As SEC Chairman Gensler recently testified, there is, in some
ways, a gap here, because unlike traditional commodity spot mar-
kets, which are like cattle auctions—I am buying a commodity from
you, you are selling it to me—these markets have much higher vol-
umes and a lot more retail participation. So accordingly, it may be
appropriate to extend market supervision to these entities.
Another reasonable approach that I think would follow Chairman
Gensler’s recommendations is another piece of legislation that you
introduced last Congress, the Digital Commodity Exchange Act—
I’m sorry, former Representative Conaway introduced the legisla-
tion, but you co-sponsored it. And for that, we are grateful because
it would create a reasonable guardrail-based approach to market
supervision for places where people are trading these commodities,
even at the spot market level.
Mr. EMMER. I would add that I also introduced the Securities
Clarity Act, which provides clarity for the SEC on token issues to
swiftly determine when and if a token is a security. In the short
time we have left, I believe that we do have the regulatory frame-
work, the laws in place. People in this country don’t get to run
under the radar if they are not complying with KYC and all of the
other regulations that are out there.
Would you agree, Mr. Van Valkenburgh, that the real issue here
is, while we can do some work perhaps as Congress on the margins
to clean up some of this, the real issue is that the application of
existing regulation and laws has not been consistent, and there has
been little enforcement in terms of court decisions or things that
can give us precedent so people in this area know what is right and
what is wrong?
Mr. VAN VALKENBURGH. I think that is right. There is a certain
wisdom to our flexible and open standards for investor protection
in this country, like our securities laws that have these broad and
flexible standards. However, they only work if controversies end up
in court and judges make clear rules about new application of those
laws. And one thing we have seen is a replacement of a lot of deci-
sions made by judges acknowledging the interest of the parties,
with administrative guidance that is not always as clear as it could
be. But the underlying laws are sound and should be applied.
Mr. EMMER. Thank you.
Chairman GREEN. The gentleman’s time has expired.
The Chair recognizes the gentlewoman from North Carolina, Ms.
Adams, for 5 minutes.
Ms. ADAMS. Thank you. Thank you, Chairman Green, Ranking
Member Emmer, and Chairwoman Waters for holding the hearing
today. To our witnesses, thank you as well.
Ms. Parker, there is a great deal of interest from both the public
and from Members of Congress with respect to the current regu-
latory framework overseeing cryptocurrencies. So, as the Vice
Chair of the House Agriculture Committee, I have heard plenty of
discussion from my colleagues about not only who should regulate
cryptocurrencies, but how they should regulate these entities. As
you alluded to in your statement, many of these discussions have
centered around the roles of the SEC and the CFTC. So, how are
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cryptocurrency markets currently regulated in the U.S., and is this
level of oversight and regulation sufficient protection from the at-
tendant risk posed?
Ms. PARKER. Thank you. That is an excellent question, and sort
of like you, I come from the commodities world when I am looking
at these markets, and Bitcoin and Eth are the two tokens that
have a very clear regulatory framework. They are commodities.
And so at the spot level, the cash level, the CFTC has generally
not been active in that space in terms of the robust market over-
sight that they provide to their futures exchanges, and that is just
because of the function of the commodity markets. They sort of
arose from commercial entities coming together to buy and sell
their pork bellies and orange juice concentrate, and wheat, and
corn, and soy. And so, those markets—we don’t really have estab-
lished treating spot markets for physical commodities or any form
of commodities. So, Bitcoin is sort of a novel application as an in-
tangible physical commodity. It is sort of a novel application of
these laws and these systems that have existed for almost 100
years.
What I would recommend, what I think makes sense is that
since the CFTC is a very sort of robust and experienced market
regulator, I think it makes sense to draw digital asset spot prod-
ucts. I am not talking about other physical commodities, I am not
talking about financial commodities, just digital asset spot com-
modities. I think it makes sense to pull them into the CFTC’s mar-
ket oversight framework and apply those market conduct and mar-
ket surveillance requirements that are imposed on the CME and
ICE to these spot markets because they—
Ms. ADAMS. Thank you, Ms. Parker. I want to move on, if I can.
Ms. PARKER. Yes.
Ms. ADAMS. I am trying to get another question in, but thank
you so much.
Ms. Su, let me pivot to focusing on consumer protections. In my
opinion, we have spent too much time over the past few years fo-
cusing on what happens on Twitter, but when it comes to
cryptocurrency volatility, Twitter has been front and center. In
January, we watched Bitcoin, with each Elon Musk tweet, fluctuate
in the months thereafter, so let me ask you, what are the most con-
cerning risks to investors in the marketplace, and how can those
risks be mitigated most effectively by regulators? Ms. Su?
Ms. SU. Yes, thank you. I think from an investor protection per-
spective, if you look at capital markets-related concerns, there are
three groups of primary risks we consider. Market volatility, as you
highlighted, is definitely front and center, but the traditional way
to handle it is through disclosure and investor restrictions. By that
we mean you provide material information about the risk so inves-
tors would go into risk taking in an informed way so they would
price the risk accurately. Similarly, with investor protection re-
garding restriction, if you deem the instrument to be highly volatile
and highly risky relative to the risk tolerance and the financial
cushion certain individual investors have, you may exclude those
investors from such investments.
Ms. ADAMS. Okay.
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Ms. SU. There are other risks related to fraud and scams, so ob-
viously, you handle it through rulemaking, enforcement, reporting.
And then the third category, which people usually don’t pay par-
ticular attention to, is safekeeping functions, like the lost pass-
word. I think you are probably generally aware that about 20 per-
cent of a certain digital asset was lost due to the lost key—
Ms. ADAMS. Yes, ma’am.
Ms. SU. —and custodian. Yes, custodian service, remedy that.
Ms. ADAMS. Thank you, ma’am. Thank you very much. I am out
of time, and, Mr. Chairman, I am going to yield back.
Chairman GREEN. The gentlelady’s time has expired.
The gentleman from Georgia, Mr. Loudermilk, is now recognized
for 5 minutes.
Mr. LOUDERMILK. Thank you, Mr. Chairman, and thanks to the
panel for being here. It is a very important hearing we are having
here today, and I think it is something we need to be looking at.
But one of the aspects of being here is that a lot of times, people
draw a line in the sand very early on, and they take an early posi-
tion on something, especially when it is dealing with technology,
because it is something they either don’t understand or there is
this fear factor. And I have seen that with cryptocurrency, because
a lot of times, we don’t see the forest for the trees. And in this case,
I think there is something that we miss out on because we have
either decided we are for or against cryptocurrency, and that part
we are missing out on is the blockchain technology that is under-
lining, which I think is very valuable for us in this nation, espe-
cially in the Federal Government.
And I have been advocating for a long time that we utilize, or
at least we look very strongly at using blockchain technology as a
solution to our cybersecurity issues here in this nation. When you
consider the Federal Government—and we know that we have had
cyberattacks—there has been loss of data and people’s personal
data has been inadvertently disclosed, which caused a lot of issues.
That isn’t that hard to do when you consider at how many points
my personal information and others’ personal information resides
within the Federal Government. There is duplication of data in
every place. My Social Security number, my date of birth, my ad-
dress, phone number, all of this resides in another system that is
susceptible to attack. And all it takes is one weak link, and then
you have exposed it.
If you look at it as a veteran, my information is at the VA. From
years of working in business, it has been with various departments,
the Social Security Administration, you name it, the IRS—if you
look at all of the different databases, I did a count one time, and
there could be 47 different data points where just my information
would reside, and all it takes is the breach of one of those. Because
of the decentralization of blockchain, it seems to me, that may be
the solution to the cybersecurity problems that we have in this na-
tion.
Ms. Hammer, is this something that you would agree with, and
can you describe how the blockchain technology could be used to
enhance cybersecurity?
Ms. HAMMER. Congressman, thank you for that excellent ques-
tion. I appreciate the chance to talk about the potential benefits of
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19
blockchain technology. It is absolutely something that I would
agree with and certainly something that we work with on a day-
to-day basis at the Stevens Center at Wharton. As you mentioned,
blockchain is a decentralized technology, and that is key because
it has no single point of failure, so there are many different uses
for the technology, in addition to cryptocurrency. With each new
block in blockchain, the previous blocks are stored, and this creates
a fully traceable history log, so it can potentially have many cyber-
security applications. Blockchain can, therefore, be used to create
security profiles for user data, such as you mentioned, and it pro-
tects the data by decentralizing it.
In addition, blockchain technology incorporates something known
as public key and private key security. Public key infrastructure,
much like an email address, can be used to authenticate and au-
thorize parties. And private keys can be combined with it for end-
to-end security and encryption of our data. Blockchain can be used
for many different means in cybersecurity. It can decentralize secu-
rity devices, such as a home security system, to discourage hackers.
It can protect websites by decentralizing domain name servers,
such as separating an IP address from a name. And it can be, in
fact, combined with other security protocols, like biometrics, in
order to strengthen our cybersecurity options. So, I fully agree
there are many applications for blockchain technology, and it is im-
portant for us to remember that this is the technology that powers
crypto. But the technology itself also has many applications, and
we would behoove ourselves to consider those innovative possibili-
ties.
Mr. LOUDERMILK. And that is the challenge I have had, is sepa-
rating what some will consider the stigma of cryptocurrency from
blockchain. In the remaining time, I have one other question. Do
you have concerns with a potential central bank digital currency?
Ms. HAMMER. Thank you, Congressman, for that excellent ques-
tion. I know that central bank digital currency has been the subject
of other hearings in this forum, and certainly it is something that
is being studied really across the country by many different aca-
demics and not-for-profits. I think it is important to consider that
central bank digital currency could take many different forms. It
could be blockchain-powered. It could be not blockchain-powered
and run along a traditional database system such as we do cur-
rently. There are concerns about central bank digital currencies.
Some of them relate to issues around privacy and whether it actu-
ally achieves the objective of having a central bank digital currency
because, rather than a decentralized system, which cryptocurrency
is or blockchain is, having a central bank digital currency would
concentrate our private information and, therefore, could poten-
tially be a target for hackers. At the same time, I recognize—
Chairman GREEN. The gentleman’s time has expired. Would you
kindly give the rest of your answer in writing and submit it for the
record?
Ms. HAMMER. Absolutely. Thank you.
Chairman GREEN. Thank you very much, and when I have my
time, I may give you the opportunity to finish with my time.
The gentlewoman from Georgia, Ms. Williams, the Vice Chair of
the subcommittee, is now recognized for 5 minutes.
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Ms. WILLIAMS OF GEORGIA. Thank you, Mr. Chairman. My top
priority in Congress is ensuring that those most marginalized re-
main at the center of our policy considerations. When it comes to
digital assets, this means making sure that investors of all experi-
ence levels have equitable access to information about the digital
asset that they are investing in.
Ms. Hammer, how can regulators best communicate with all con-
sumers, especially those who may be investing for the first time,
about any risk associated with investing in digital assets and ways
to avoid predatory behavior in the market?
Ms. HAMMER. Congresswoman, thank you for that excellent ques-
tion, and, as I mentioned in my oral testimony, investor protection
is a key concern and priority when we think about cryptocurrency.
And I return to what I recommended in terms of coordinating Fed-
eral agencies because investor protection, consumer protection, and
even ERISA in the Department of Labor are implicated when we
think about investing in these markets. Not every investor is the
same. Investors have risk profiles. They have different periods of
time that they can invest in, and not every asset is appropriate for
every vehicle.
Today, we are seeing cryptocurrency being introduced into things
like retirement funds. We are seeing the rise of cryptocurrency
amongst younger investors through different applications. And so,
I do feel strongly that: number one, coordination through the
FSOC, through the Federal financial agencies is extremely impor-
tant both from a consumer protection perspective and investor pro-
tection; and number two, that we have the data and the resources
to evaluate what is happening in the market. Without an official
public data source, I think that we are a little bit in the dark about
what the proper regulatory framework should look like.
Ms. WILLIAMS OF GEORGIA. Thank you. It is important that we
ensure consumer protection when it comes to digital assets, but we
also have to be sure that we are protecting the health of the broad-
er economy as the use of digital assets expand. So, Ms. Hammer,
more on this. Given that digital assets can change rapidly in value,
are there legislative considerations that Congress should keep in
mind to ensure any risk to the broader economy is minimized as
investment expands in these assets?
Ms. HAMMER. Thank you, Congresswoman, for that question as
well, and I do believe systemic risk is a key concern. I do believe
that the Financial Stability Oversight Council is the proper author-
ity to consider systemic risk. Under Section 120 of the Dodd-Frank
Act, it actually has a specific mandate to do so. The fact is that
cryptocurrency has really infiltrated many different aspects of our
financial system, and regardless of what we may think the benefits
and costs of that may be, it is the reality today. Not only do inves-
tors hold crypto in their individual portfolios, but we see it in pri-
vate funds, as Ms. Goldstein mentioned. We see it in banks. We
have permitted banks to serve as custodians. We have national
trust banks that are operating as crypto companies, and we have
50 different States that are looking at a myriad of crypto rules. I
think at last count, 31 States were actually looking at crypto legis-
lation in the current session, so this level of activity can be useful
if it is innovative, but I think the key thing is that we have a race
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to the top and not a race to the bottom. And there are some things
that should be regulated on a Federal level.
As far as what a specific legislative mandate would look like, I
think that is to be determined after substantive study by the
FSOC, after we have established some public data sources and
there is clear coordination amongst the agencies.
Ms. WILLIAMS OF GEORGIA. Knowing that we need more research
and investigation around this, I am thinking more along the lines
of some of my priorities in Congress, which are ensuring consumer
protection and the benefits to financial inclusion for more people.
So, are there any considerations that you have in mind for Con-
gress that specifically speak to those two areas?
Ms. HAMMER. Thank you, Congresswoman, for that point as well.
I think the issue of financial inclusion is crucial when we think
about crypto. As we digitize our economy, the reality is that some
people may be included more and some people may be included
less, and I tend to think globally, because that is the kind of re-
search that we do at The Wharton School. When I think about fi-
nancial inclusion globally, there are 1.7 billion people who are
unbanked, and two-thirds of them do have mobile phones. Now,
that may differ from what we have in the U.S. I think that having
legislative priorities around consumer protection related to these
assets would be important, but I also think that clarity in that
space and international coordination is key because the technology,
going back again to the uses of the technology, has many beneficial
functions for others in other areas who may not be so lucky to have
stable currencies. They may be subject to political and economic in-
stabilities that make using crypto an important method for them
to run their businesses and to support their families.
Ms. WILLIAMS OF GEORGIA. Thank you, and my time has expired.
Ms. HAMMER. Thank you.
Chairman GREEN. The gentlelady’s time has expired.
The Chair now recognizes the gentleman from Tennessee, Mr.
Kustoff, for 5 minutes.
Mr. KUSTOFF. Thank you, Mr. Chairman. Ms. Hammer, if I can
continue with you just briefly, I know that you were not finished
answering Mr. Loudermilk. Was there anything you wanted to say
in conclusion to his questioning?
Ms. HAMMER. Thank you so much, Congressman. We were dis-
cussing central bank digital currency (CBDC), and I wanted to ac-
knowledge that there may be privacy concerns around central bank
digital currency, but emphasized that there are many different
iterations the technology can take. And I think, going back to some
of our earlier discussion, one of the key priorities that we focus on
in our work related to Fintech and blockchain at the Stevens Cen-
ter is financial inclusion. And so, when I think generally at a very
high level about CBDC, I believe that is a focus that we should
continue with, and it is an important topic of discussion related to
crypto as well. Thank you.
Mr. KUSTOFF. Ms. Hammer, if I could, along those lines, Vice
Chair Quarles of the Fed, I believe on Monday, I am going to char-
acterize, expressed some skepticism about central bank digital cur-
rency. My question to you is, and we have talked about innovation
and about stifling innovation, do you personally have concerns if
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22
we move slowly, and, say, the Chinese accelerate? Can you play out
what happens over 12 months, 24 months, 5 years?
Ms. HAMMER. Thank you, Congressman, for that question, and I
know it is an important topic for all of us as we think about CBDC.
To be honest, I don’t have any particular expertise on China and
our policy as it relates to China. I would say that one of the things
that I think is valuable about thinking about blockchain technology
generally and CBDC as it may relate, is how it can improve our
financial infrastructure and our financial system. We live in a
world today where it takes days to clear and settle a payment. We
live in a world where we have intra-day between counterparties
who are trading. We have an antiquated central clearing
counterparty system that is in need of a revamp in some ways. And
so, I believe that we should be doing everything we can to mod-
ernize our system, and that we should be taking advantage of the
available technologies.
The key thing, from my perspective, is regulatory clarity. I think
that clarity is required for businesses to innovate. I see it every day
in some of the companies that we work with. For a company to de-
velop a product, or create a go-to-market strategy, or raise money,
they need clarity in the law, and this is an area where they just
don’t have it on particular issues. So, my belief is that we should
be working in a coordinated fashion to provide that.
Mr. KUSTOFF. Thank you, Ms. Hammer.
Mr. Van Valkenburgh, inflation is a concern for people across the
country, certainly in my district in West Tennessee. In an inter-
view recently, you talked about or you advocated essentially that
a consumer may want to buy Bitcoin because it could be a way to
balance an investment portfolio against the threat of inflation.
Could you expound on that, please?
Mr. VAN VALKENBURGH. Sure. So, the intuition here is fairly
straightforward. Bitcoin is the world’s first digital commodity, and
it functions rather like gold, except it is gold that you can send
peer-to-peer over the internet. Now, as to the wisdom of any par-
ticular investment in a portfolio, I think most people agree that di-
versity is how we can achieve greater financial stability for our-
selves and for our major institutions. And so, my point in that pre-
vious interview was simply that, as part of a diversified portfolio,
one might be interested in owning some Bitcoin, along with some
gold, along with some stocks—American industries, overseas indus-
tries—in order to achieve some balance and hedge against the risk
of inflation should we see it being pronounced.
Mr. KUSTOFF. And you may have answered this, but would you
advocate that strategy, for lack of a better word, for the average
retail investor?
Mr. VAN VALKENBURGH. I think we have guardrails in place now
for these Bitcoin spot markets, for example, that make that a safe
bet as long as we have good investor education, which is always a
perennial problem. But if you go to the right places, the American-
run companies, they are State-licensed money transmitters, they
are New York Department of Financial Services-chartered banks
and trusts. And these are safe places where a customer will be
given clear information about what they are buying from a person
who has posted a bond, can prove minimum capital requirements,
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23
and has a robust regulatory structure around them to ensure inves-
tor protection.
Mr. KUSTOFF. Thank you, sir. I thank you, I thank the other wit-
nesses, and I yield back.
Chairman GREEN. The gentleman yields back.
The Chair now recognizes the gentlewoman from Michigan, Ms.
Tlaib, for 5 minutes.
Ms. TLAIB. Thank you so much, Mr. Chairman. We all know that
cryptocurrency like Bitcoin currently consumes enough energy to
power a small nation, and the Cambridge Bitcoin Electricity Con-
sumption Index is one of the most-cited cryptocurrency energy esti-
mates. Right now, estimates sit actually at an annualized consump-
tion of 66.14 terawatt hours. That is actually around a third of the
energy consumption of Facebook, Google, and Amazon’s data cen-
ters combined. But due to the decentralized nature of
cryptocurrency, even the Cambridge model is just a small—not a
precise estimate, and their upper bound is probably as high as 150
terawatt hours each hour. As Bitcoin miners compete against one
another for increasingly scarce tokens, energy usage increases.
Mr. Van Valkenburgh, how can we better measure the energy
consumption and energy resources of cryptocurrency to account for
its carbon footprint?
Mr. VAN VALKENBURGH. I agree that the Cambridge data is our
best shot right now at looking at this question. What we have the
benefit of is knowing everything that the peer-to-peer ledger tells
us. It is shared and open. It is not a proprietary standard from a
corporation. And the peer-to-peer ledger shows us how much work
these miners are performing to make sure that transactions get in
blocks and they are not censored by some third party or some gov-
ernment that wants to coerce certain transactions or block certain
transactions. It is this vibrancy between miners that guarantees
that the miners cannot form a cartel and choose to systematically
exclude certain persons from this financial system. When you have
them compete and when you have evidence of their competition in
the form of proof-of-work calculations on a public ledger that any
person can audit independently, you get that censorship resistance.
As far as energy usage—I’m sorry.
Ms. TLAIB. No, go ahead. I need to get to my next question, be-
cause I really want to talk about the carbon footprint.
Mr. VAN VALKENBURGH. Okay. I will be brief. I’m sorry. So as far
as energy usage, it is worth noting that the traditional financial
sector uses an estimated 5 times more energy than Bitcoin. Now
granted, the traditional financial sector moves more money, but it
is worth noting that Bitcoin energy usage does not scale per trans-
action, so most of the costs are the fixed costs of setting up an open
peer-to-peer system that is robust, and we have technologies like
the Lightning Network that can bundle millions of transactions
into that existing system without a meaningful increase in energy.
So, it is possible we can have an open financial system that is cen-
sorship-resistant using one-fifth of the energy of the current finan-
cial system, if we were to eventually move more transactions—
Ms. TLAIB. Sure. Thank you. Ms. Goldstein, is cryptocurrency
fundamentally incompatible with a carbon-neutral future?
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24
Ms. GOLDSTEIN. Congresswoman, thank you for the question. I
think it depends. It depends on the cryptocurrency. It depends on
which system it uses for validation. So, proof of work, I would
argue, is the most carbon-intensive of the validation systems in
cryptocurrency. This is the one that Bitcoin uses, this is the one
that Ethereum currently uses, but it is trying to move away from
it, and that is because it is effectively a lottery system. Any miner
can try and compete for the 6.25 Bitcoin reward that is generated
every 10 minutes, and everyone is essentially trying to guess the
address of the next block. Some people describe this as solving com-
plicated math problems, but it has a lot of people competing for a
single reward and it generates a lot of energy.
I think as more cryptocurrencies embrace different validation
methods, whether it be proof of stake, proof of history is another
one, perhaps the footprint could be reduced, but it seems unlikely
that Bitcoin will move away from the proof-of-work method. And as
you cited, the Cambridge Index, when crypto is very high, when
Bitcoin reached its highs in May, we saw an estimate of 143
terawatt hours, which is more than the consumption of Argentina
and more than the consumption of Norway. And so, I think the an-
swer is it depends, but I think the proof-of-work validation method
is climate-incompatible.
Ms. TLAIB. Well, no, a recent study out of China suggested that
without taking any action to curb the greenhouse gases produced
by electricity generation for Bitcoin mining, that they could see,
like, 130 million tons of carbon per year. Mr. Chairman, my point
is that the climate crisis is here. We need to do everything we can
in our power and our purview to really, truly reduce our carbon
footprint and so many other things that we are trying to do in ad-
dressing that. I saw firsthand what was happening in my commu-
nity as we saw record rainfall. But I really do appreciate this com-
mittee hearing, and I yield back.
Chairman GREEN. The gentlelady yields back.
The Chair now recognizes the gentleman from South Carolina,
Mr. Timmons, for 5 minutes.
Mr. TIMMONS. Thank you, Mr. Chairman. Some of my Democrat
colleagues have painted a broad brush against cryptocurrency as
the purview of charlatans and scammers. In fact, Mr. Sherman has
called for an outright ban on cryptocurrencies in the United States.
If we could, just for a moment, take a deep breath and heed the
words of President Obama’s own CIA Director, Mike Morell, who,
in a recent report said that, ‘‘Bitcoin’s use in illicit finance activity
today is extremely limited and blockchain ledgers are a highly ef-
fective crime-fighting and intelligence gathering tool.’’ He urged for
a more fact-based dialogue between industry and government to
ensure that real risks are mitigated and the opportunities for po-
tentially revolutionary technologies are not squandered.
Mr. Van Valkenburgh, is this the road we are headed down? Are
cooler heads prevailing or will alarmism win out?
Mr. VAN VALKENBURGH. I have been lucky to have the job that
I have had for the last 6 or 7 years now where we have gotten to
meet with all of the regulatory agencies that have some piece of ju-
risdiction over cryptocurrency, both in the Obama Administration
and now in the Trump Administration. And I have always been im-
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25
pressed by the level of knowledge of that one person, or maybe that
small group of people within the agency who is focused on this
technology and focused on reasonably applying the existing rules to
the risks presented by the technology. I think at the regulatory
level, we have seen cooler heads prevail for a long time, and I am
grateful for that. We have had reasonable regulation from an anti-
money laundering standpoint. To counter what Representative
Sherman suggested, we have seen KYC and AML at all of the U.S.
exchanges and robust suspicious activity reporting. And I have
talked to law enforcement who have actually said they prefer doing
investigations when it is on an open blockchain network because
there is a single source of truth, which is a ledger, rather than a
number of dubiously well-held records at international financial in-
stitutions.
Mr. TIMMONS. Sure. Thank you. Thank you for that answer. It
really frustrates me when I hear members of this committee imply
that Americans are not smart enough to know that investing in
cryptocurrencies carries risk or even the capital markets, more
broadly. We heard a similar tone in the GameStop hearings as
well. They won’t come right out and say it, but I find it insulting
that members of this committee feel that their constituents don’t
know what they are doing when they make investments. I am not
going to patronize the folks back home in my district. Do we have
a role in making sure they know what they are getting into? Abso-
lutely. But let’s stop implying that our constituents don’t know
what they are doing.
My next few questions are for Ms. Hammer. There is a common
misperception which we have heard several times today that
cryptocurrency is, ‘‘unregulated.’’ However, we have seen the SEC
and other regulators at the State and Federal level be proactive in
enforcement actions and providing guidance as to how businesses
can offer services in relation to cryptocurrency. Can you describe
the current regulatory state of cryptocurrency in the United States,
and regulations that crypto companies have to comply with in re-
gards to consumer protection?
Ms. HAMMER. Thank you, Congressman, for that excellent ques-
tion, and it definitely covers many of the issues that we have dis-
cussed here today and the complexity of the regulatory framework.
The reality is that crypto and crypto companies receive different
types of regulatory treatment throughout our regulatory system.
This is how our system works. The Internal Revenue Service issued
a notice in 2014 that crypto would be treated as property, but if
you are paid in crypto for your work, it is treated as income and
taxed as such. The Securities and Exchange Commission may regu-
late cryptocurrency as a security if it meets the criteria of the
Howey test unless that particular asset is eligible for an exemption.
In some cases, crypto may be regulated as a commodity by the
CFTC, and there are many different types of companies that inter-
act in the crypto world now that have different authorities, such as
the National Trust Charter from the Office of the Comptroller of
the Currency. And as I mentioned earlier, we have a number of
States that are innovating their own regulatory frameworks.
So, my key issue is that we need regulatory clarity in our policy-
making, and I believe that we have an authority in place through
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26
the FSOC to lead that at a high level. The FSOC has a mandate
under Dodd-Frank Section 120 to coordinate around issues related
to potential systemic risk. And in addition to that, it has the ability
to form a technical or advisory committee, including one that would
work with the States. In addition, the FSOC is charged with con-
sultation with international standard-setting bodies, and we have
talked about a number of issues today that are international in na-
ture. In fact, crypto crosses borders. There are places where there
are gaps in the regulation, and the best way to address that is
through international standard setting.
Mr. TIMMONS. So, do you think that the Federal agencies have
the tools necessary to coordinate their efforts around blockchain
and crypto regulation, or do you think it is going to require con-
gressional action?
Ms. HAMMER. I believe that we have the authority in place to co-
ordinate through the Financial Stability Oversight Council. That
said, I think we have a lack of clarity in the regulatory framework,
and I strongly believe that we need to have official public data
sources. In order to create a framework for cryptocurrency regula-
tion, we need a map, and to have a map, we need data about where
is crypto, where do the risks lie, et cetera.
Mr. TIMMONS. Ms. Hammer, I’m sorry, my time has expired. I
appreciate your answer. With that, I yield back. Thank you.
Ms. HAMMER. Thank you.
Ms. WILLIAMS OF GEORGIA. [presiding]. The gentleman from Illi-
nois, Mr. Garcia, is now recognized for 5 minutes.
Mr. GARCIA OF ILLINOIS. Good morning everyone, and thank you,
Chairman Green and Ranking Member Emmer, for hosting this im-
portant hearing, and, of course, thank you to the witnesses today.
I think it is easy to fall into a trap of believing that cryptocurrency
is too technical for everyday people, that trends like GameStop and
crypto are funny, weird coincidences that might make you rich. The
fact is that the crypto market represents more than $2 trillion in
assets, and $2 trillion matters to everyone. In this committee, it is
our responsibility to look after the financial system.
I watched my neighbors lose their homes in the great financial
crisis, and many neighborhoods in my district never recovered. I
am glad that we have not faced another crisis like that yet, but I
am very worried about the future. The fact is we don’t know all of
the risks that cryptocurrencies create for us, and we know that
cryptocurrencies are extremely volatile. We know that some of our
largest banks are figuring out ways to get into them, but we don’t
know how concentrated ownership is, and we don’t know how ex-
posed our hedge funds already are. So, in short, we know that
crypto is big, but we don’t know all of the threats that it can pose.
Ms. Goldstein, it seems like many of the cryptocurrency pro-
ponents are at least honest. They want to get around regulations.
How much of the appeal of cryptocurrency is just regulatory arbi-
trage instead of real innovation?
Ms. GOLDSTEIN. Thank you for the question, Congressman. I
come at this from the perspective of someone who worked at Mer-
rill Lynch and Deutsche Bank—well, Merrill Lynch prior to the
2008 financial crisis. I worked for the over-the-counter equity de-
rivatives trading desk before Dodd-Frank, when there was no regu-
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27
lation, and all of the trading was essentially opaque, and the
cryptocurrency markets remind me of that time. And there have
been statements in this hearing today that all U.S.-based ex-
changes have Know Your Client requirements, which is true, but
that is not the only place U.S. users can trade cryptocurrency.
There are DeFi platforms, and I have yet to come across a single
DeFi platform that has Know Your Customer requirements. And
so, there are a number of ways to sort of evade some of the so-
called safeguards that are already being touted as being in place.
And I think we need to look at what CFTC Commissioner Dan
Berkovitz recently said in a speech, which is that some of these
DeFi platforms are operating as unregulated, unregistered ex-
changes and may be illegal under the Commodity Exchange Act. I
also think that we need to be concerned about leverage—leverage
by institutions, but also leverage by retail investors. Retail inves-
tors in the stock market traditionally can’t have more than a 2 to
1 leverage, but in cryptocurrency markets, many individual inves-
tors can get up to a 125 to 1 leverage, and that can wipe you out
quite quickly. And so, there are opportunities in the space, unfortu-
nately, for regulatory arbitrage, and I do think that is part of the
reason that they have been successful to date. I do think that the
regulators should take a close look at their existing enforcement
abilities to see what can be done about that.
Mr. GARCIA OF ILLINOIS. Thank you. I think you just got to the
second question I was going to ask you, and that is, what are the
most important things that regulators can do to keep crypto from
threatening our financial system?
Ms. GOLDSTEIN. Congressman, I will take a shot at elaborating.
I do think that in some ways, the United States is behind. There
has been a lot of recent regulatory activity. Canada has pursued
enforcement actions against Bovet and KuCoin, among others.
Japan and Germany have warned Binance about their so-called
tokenized stocks, which are essentially crypto assets that track the
performance of stocks and look very similar, to me, to the kinds of
equity swaps or total return swaps that crashed the Archegos Fam-
ily Fund. We recently saw the U.K.’s Financial Conduct Authority
(FCA) tell Binance that they need to put a warning on their
website as of today saying that they are not registered with the
FCA. And I think in some ways, the U.S. regulators are behind
international regulators in putting out these sort of consumer
warnings, so that is one thing that they could do.
Another thing that they could do is look at leverage by retail in-
vestors. Why is there this difference between the access to leverage
of retail investors in the stock market and in the crypto markets?
And as I said in my opening statement, I think it is very impor-
tant, whether it is Congress or the regulators, that we pursue an
avenue to ensure that private funds, like hedge funds, are dis-
closing what their cryptocurrency positions are so that the regu-
lators can get a handle on any systemic risk concerns.
Mr. GARCIA OF ILLINOIS. Thank you so much. I yield back.
Chairman GREEN. The gentleman yields back.
The Chair now recognizes the gentlewoman from Texas, Ms. Gar-
cia, for 5 minutes.
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Ms. GARCIA OF TEXAS. Thank you, Mr. Chairman, and thank you
for calling this very important hearing on a topic that has been on
the minds of many of us. The issue of crypto assets is so important
to us because we must understand what the financial marketplace
of the future will look like. Digital assets present an exciting new
frontier with the potential to bring the unbanked into our economy.
In fact, 12.2 percent of Latinos and 13.8 percent of Black house-
holds were unbanked in 2019 compared to only 2.5 percent of
White households. This is not the first time I have discussed that,
and I will continue to discuss it.
While cryptocurrency is a new frontier, we must be cautious to
make sure that we protect consumers from any avoidable risks. We
need to bring disenfranchised Americans into the financial fray,
but we must also look at the bigger picture to make sure that we
do not inadvertently allow a system to grow that grants too much
market power to a few decision makers. It is our job as lawmakers
to protect the consumers from financial abuses. This includes pro-
tecting the sovereignty of the U.S. dollar. We cannot allow anyone
to compete with our U.S. dollar. Without a sovereign dollar that
represents the primary form of currency in this country, we risk
destabilizing our financial markets, and I would also suggest it
would destabilize global markets. We must protect the valued mer-
its of the U.S. dollar, both in cash and digital form.
Stablecoins, such as Facebook’s Diem, present a sovereignty risk
to our domestic currency. In other words, there is a risk of these
stablecoins replacing the U.S. dollar and undermining the Federal
Reserve’s ability to perform its critical functions as the central
bank. The World Economic Forum has warned its member coun-
tries of this risk, and the Bank for International Settlements has
urged countries to form their own central bank digital currencies
so they can offer access and still protect the sovereignty of their
currencies.
Last Congress, I introduced a bill to regulate and manage
stablecoins as securities. Pegging them to a currency without prop-
er regulation, like Facebook has done with Diem, is a step forward,
but it does not address all of the risk.
Ms. Goldstein, I wanted to start with you. How urgent is this
need for regulating stablecoins and protecting the U.S. dollar?
Ms. GOLDSTEIN. Congresswoman, thank you for the question. I
think it is an urgent need for regulators to look into stablecoins.
Thankfully, we have already had State attorneys general looking at
the problem. New York State Attorney General Letitia James has
looked at BitConnect, which operates the Tether stablecoin, and
they have recently reached a settlement, and you can no longer buy
Tether in the State of New York. But I think there are a lot of
questions about what is Tether actually backed by. They recently
had to disclose a number of their reserves, which included commer-
cial papers and cash-like products, but they had very little actual
cash. They had some commodities. They had some other digital as-
sets. And I think there was recent reporting, I believe it was in the
Financial Times, where they asked some of the large banks, who
tend to be one of the major counterparties for commercial paper,
and they said they hadn’t done any business with BitConnect, so
who are they doing business with?
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I think this is an opportunity to make sure that stablecoins are
actually based on something, and we are not just relying on faith,
that it is actually pegged to some denomination of the U.S. dollar
or another currency. And I think perhaps one way to approach that
would be to have central banks issue central bank digital cur-
rencies—
Ms. GARCIA OF TEXAS. Right. And we hear from some, ‘‘You can’t
do that.’’ It is not about regulation. We can’t go under as a govern-
ment. We always just regulate. We have to allow for innovation. Do
you see that it is possible to strike a balance where we protect in-
novation and we allow that to occur, but balance the need for the
sovereignty of our dollar, and balance of protection that we need
for consumers?
Ms. GOLDSTEIN. Congresswoman, yes, I think we absolutely can
achieve that balance. I don’t think it is unreasonable to want to en-
sure that something that pretends to be pegged to one U.S. dollar
actually is and isn’t capable of breaking the buck and people losing
their funds. That is not to say that there aren’t existing problems
in the financial system. I think there may be similar problems with
money market mutual funds and their sort of ability to peg them-
selves to the dollar and break the buck. But we can always do bet-
ter, and we can strike the right balance to both protect consumers
and also encourage innovation. I don’t think that they are in con-
flict.
Ms. GARCIA OF TEXAS. Thank you. I did have one more question,
but I will submit it in writing, Mr. Chairman. I see that my time
is down to 3 seconds, so I will yield back.
Chairman GREEN. The gentlelady yields back. The Chair now
recognizes the gentleman from Ohio, Mr. Gonzalez, for 5 minutes.
Mr. GONZALEZ OF OHIO. Thank you, Mr. Chairman, and thank
you to our panel. In a way, I am sort of encouraged by today’s hear-
ings. I think there is more broad agreement than is normal in this
committee, at least amongst the panel, the majority of the panel,
that we do need clarity. We do need clarity with respect to how we
are going to regulate in this space because we are pushing a lot the
innovation overseas. I hope we get that clarity.
Ms. Parker, I want to start with your testimony. You suggest, to
my earlier point, that this uncertain regulatory environment does
choke innovation and pushes projects overseas, correct?
Ms. PARKER. That is correct.
Mr. GONZALEZ OF OHIO. Thank you. And it forces Americans to
do things like use VPNs as a workaround, and I think you rightly
highlight that this is a bad outcome for Americans.
Ms. PARKER. That is correct.
Mr. GONZALEZ OF OHIO. Thank you. You also say that regulators
are hesitant to get involved when, in your words, ‘‘relevant Mem-
bers are hostile to crypto.’’ Subcommittee Chairs on this specific
committee would qualify as relevant. I won’t—
Ms. PARKER. They qualify as relevant, but not hostile.
Mr. GONZALEZ OF OHIO. Right.
Ms. PARKER. Right.
Mr. GONZALEZ OF OHIO. But some, potentially. So assuming reg-
ulators are listening, and I didn’t want to put you in that box
there, but you did say it, listening, I would encourage them to lis-
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30
ten to the Full Committee and not ‘‘relevant Members’’ who say ri-
diculous things, like people should invest in the California lottery
instead of cryptocurrency, and suggest that if it is possible to lose
money, that some people are going to make money and others are
going to lose money, that whatever that thing is, whatever that in-
strument is, ipso facto should be banned. And also, people who sug-
gest that because there are money launderers and bad people who
use cryptocurrencies—and there are, we know that—that it should
be banned.
I would like to cite a statistic by Katie Haun, who broke up the
Silk Road scheme a while back: 99.9 percent of money laundering
with fiat currencies goes unprosecuted. So, the commentary around
whether we should allow cryptocurrencies to exist on AML lines, I
would ask, compared to what? Compared to a fiat where 99.9 per-
cent goes unprosecuted?
I want to shift now to Mr. Van Valkenburgh. Another comment
was made was, well, it is highly volatile, and because it is highly
volatile, there is necessarily systemic risk, and we should ban it be-
cause it is highly volatile. Here are some bubbles in the crypto
space: in 2011, it went from $1 to $31 down to $2, with no systemic
risk; in 2013, $13 to $266 down to $65; in 2015, $65 to $12.42 to
$200. And then obviously, in the last year, we have seen it go from
a couple thousand to $60,000, back down to $30,000 and bounced
up. At any point, Mr. Van Valkenburgh, did the Federal Govern-
ment have to step in and prop up the cryptocurrency markets or
save anybody?
Mr. VAN VALKENBURGH. No. By definition, cryptocurrencies are
unbacked. We have heard some Members question whether that is
wise, but something that is not backed doesn’t have promises asso-
ciated with it, and so there aren’t promises to be disappointed and
someone to be bailed out in that case. It is like gold. How would
you bail out the price of gold? Whom would you pay?
Mr. GONZALEZ OF OHIO. Exactly. And then with my final minute,
I would like to talk to you. There was a comment made that people
are going to lose money, and that is definitely true. Can you com-
pare blockchain and cryptocurrencies to the early internet? Maybe
use the Pets.com and Amazon analogy, if you could.
Mr. VAN VALKENBURGH. Absolutely. So, these are brand new sys-
tems that do something amazing. They allow people across the
world to coordinate to perform and provide a service that pre-
viously could have only been performed and provided by a big com-
pany. So, just like the internet suddenly gave us the ability to all
have our own blogs and not necessarily have to rely on the New
York Times or the Wall Street Journal, the nature of Bitcoin is
quite radical. It allows us to rely on ourselves in addition to cen-
tralized entities. And the radicalness of that innovation is some-
thing that people will get excited about for the right reasons, and
sometimes overly excited for the wrong reasons. So, I think it is a
good metaphor.
Mr. GONZALEZ OF OHIO. Right. And so, there is risk in the sys-
tem, but with great risk comes great reward, and if you want to
ban risk, well, guess what? You also ban reward and you ban inno-
vation. And so, I thank you, and with that, I yield back.
Chairman GREEN. The gentleman yields back.
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31
The gentleman from California, Mr. Sherman, who is also the
Chair of our Subcommittee on Investor Protection, Entrepreneur-
ship, and Capital Markets, is recognized for 5 minutes.
Mr. SHERMAN. Especially after the last gentleman’s comments, I
have a lot to say, and I will use my 5 minutes to say them. Of
course, as I pointed out in my opening statement, and thank you,
Mr. Chairman, for allowing me to make an opening statement,
those who live in the crypto world have their relevance, their for-
tunes caught up in making this successful. We are told that
cryptocurrencies are fun and useful, and there might be somebody
in my district who enjoys trading them. One thing that would be
useful would be a $10,000 bill. It would occasionally be used to buy
an automobile, but it would be uniquely valuable for those drug
dealers. We would make their lives so much easier when they have
to deal with these $100 bills. Imagine if they had a $10,000 bill.
And our natural tendency is to try to facilitate and help people do
their financial transactions. But I, for one, am not looking for a
more accurate heroin scale to make sure that one drug dealer
doesn’t get cheated by another.
We are told that you have to be for cryptocurrencies, otherwise,
you are anti-science. I am for the internet. I am for semiconductors.
I am for computers. I am for blockchain. That does not mean I have
to be for a cryptocurrency or, for that matter, for that $10,000 bill
that would make the lives of some of our constituents easier. We
have to keep pace with China. China is close to banning all
cryptocurrencies. They are going to protect their economy, protect
their currency, and protect their tax collection system. If we fail to
keep up with China, we will fall behind.
The biggest threat to Bitcoin is Ethereum. The biggest threat to
Ethereum is Dogecoin. The biggest threat to Dogecoin is Catcoin,
Dogecoin, and Hamstercoin. There is an unlimited number of po-
tentially popular cryptocurrencies. Compare that to sovereign cur-
rencies. There are a limited number of nations, but even then,
there are four or five big economies. The Uruguayan peso will
never displace the U.S. dollar, but will Ethereum displace Bitcoin?
Will Hamstercoin displace Ethereum? And, oh, by the way, if peo-
ple are going to take the time and effort and the intelligence to cre-
ate new cryptocurrencies, will they have a back door so that they
can have a few trillion dollars of their own? We are told that is im-
possible from the same people who say it was impossible that be-
tween 2017 and 2020, more than $19 million worth of Bitcoin and
Ethereum were successfully double spent, effectively counterfeiting
the supposedly hamper-free currencies. We are going to have one
cryptocurrency after another, and those cryptocurrencies will have
less and less protection.
I want to commend Rashida Tlaib for talking about the effect on
our planet, and I ask unanimous consent to put in the record an
article from the Wall Street Journal detailing how coal plants that
had been mothballed, that were no longer being used, are being put
back online just to create electricity to mine Bitcoin.
Chairman GREEN. Without objection, it is so ordered.
Mr. SHERMAN. One of our witnesses says that traditional finan-
cial systems use 5 times as much energy. Yes, that is to do 500,000
times more transactions. Everything that is purchased on this
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32
planet at the retail level is purchased with a sovereign currency,
so the 5 times is a tiny percentage. We are told that
cryptocurrencies can be a hedge against inflation. We know that
currencies are supposed to be a store of value. The dollar does
erode in value, perhaps a quarter of a percent a month. You can
buy Treasury inflation-protected securities and be fully protected
from inflation, or you can say that you are trying to get a good
store of value, so you are going to invest in a cryptocurrency that
could lose a quarter of its value if there is a joke on SNL, as there
was recently and, as we saw, a nearly one-quarter drop.
We are told that we are going to have Know Your Customer at
the level where you are trading and investing, but ultimately,
Bitcoin is supposed to be a currency, and so you transfer it to your
individual wallet, and there it is totally anonymous. Yes, the
records are maintained forever anonymously, and, with that, you
have the perfect tool for those who are underpaying their U.S.
taxes by a trillion dollars a year, concealing $3 trillion a year in
income. And that means perhaps $30 trillion that has to be hidden
every decade. Only with cryptocurrencies can we evade the effort
to enforce our tax laws. That is why cryptocurrency is popular.
Chairman GREEN. The gentleman’s time has expired.
Mr. SHERMAN. I yield back.
Chairman GREEN. The Chair will request that the gentleman
place his question in writing for the record.
Mr. SHERMAN. Thank you.
Chairman GREEN. The Chair now recognizes the gentleman from
Ohio, Mr. Davidson, for 5 minutes.
Mr. DAVIDSON. I thank the chairman, and I really appreciate this
hearing. We have come a long way in Congress, just by having this
hearing, so thank you. Thank you for the colleagues who have
taken time to prepare for it. Some know the topic very well, and
some are just getting acquainted with it, and some, no matter how
well-acquainted, will remain hostile to the idea. Look, I won’t
spend long on Mr. Sherman’s remarks, but China is building the
creepiest surveillance tool in history. We should absolutely not
emulate them. The whole fact that China is doing that is why we
should be embracing decentralized distributed ledger technology
that is more secure and does protect privacy. We could actually go
further to defending freedom and restoring our Fourth Amendment
constitutional protections in the financial sector by embracing the
potential of this technology, not by being hostile to it. The third-
party doctrine has annihilated the whole concept of privacy, and,
yes, we absolutely should keep the country safe. I could spend a lot
longer, but I am reminded of Proverbs 26:4, so I won’t spend longer
on his comments.
Ms. Su, your testimony is the only one I saw that discussed Teth-
er at length. I would like to delve into that for a moment. Ms. Gold-
stein, you spoke about the same topic. Last month, Tether revealed
the breakdown of its reserves. In their disclosure, we learned that
nearly 50 percent of its reserves are held in unspecified commercial
paper of unknown quality. I looked at a few constant net asset
value funds or liquidity funds held by larger banks to see how their
composition compares to Tether’s. While these funds are not a part
of the crypto market, they are targeted for investors with surplus
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cash deposits who seek liquidity from their investments. Thus, they
serve a similar function to Tether or other stable coins.
What I found when I looked into these liquidity funds was that
commercial paper accounted for around 25 to 30 percent of their
underlying reserves in the net asset value funds. Additionally, we
know the quality of those commercial paper holdings is disclosed.
Ms. Su, based on Tether’s disclosure, do you think there should be
further disclosure regarding its underlying composition?
Ms. SU. Yes, I think that one was the first disclosure ever, and
the New York Attorney General’s office took actions in inves-
tigating the case prior to its mandated disclosure as part of the set-
tlement agreement. And some of the argument focused around the
earlier promise of full backing and whether the disclosure came out
to match that early promise.
Mr. DAVIDSON. Yes, and definitely a relevant piece. It is easy to
break the buck, particularly when you hold structured credit with
an undisclosed quality for the structured credit, so where they are
at in the position is really important. It may not actually be a
stablecoin.
Ms. Parker, in your written testimony, you said that the SEC is
not comfortable approving traditional regulated products based in
crypto, such as a Bitcoin ETF, even though it, ‘‘would provide more
transparency into crypto markets.’’ You go on to say, ‘‘Because of
this hesitancy, there is a lack of regulated products that are com-
mercially attractive to market participants.’’
Ms. Parker, can you expand on how regulated commercial prod-
ucts like a Bitcoin ETF and other traditional regulated products
would bring additional consumer protection elements to the
cryptocurrency system?
Ms. PARKER. Thank you, Congressman. That is a great question.
My point really is that there are not sort of the Bitcoin ETFs, the
leveraged products, the margin products that are available on for-
eign exchanges that U.S. customers are routinely accessing through
the internet with a VPN that provides, frankly, too much leverage.
And they are likely inappropriate for most retail customers. So my
point is, to sort of stop that phenomenon, let’s counter with having
U.S.-regulated exchanges, securities exchanges, futures exchanges,
list regulated products that have some form of margin, that have
some form of leverage that is available to retail customers that is
appropriate for their sort of credit and suitability for their trading
experience.
So, let’s have this as a U.S. alternative to the foreign exchanges
that U.S. customers can access because it is just a website. So, the
Bitcoin futures, the margin products, the leveraged spot products
that retail customers are desperately seeking at the overseas ex-
changes, let’s have them in the United States.
Mr. DAVIDSON. Thank you for that. I really appreciate it. It is a
great point. Some regulation would be good. I would love to talk
more, but this is the point of the Token Taxonomy Act that has
been bipartisan from its origins, and it would provide some regu-
latory clarity for what is a security and what is not. It wouldn’t
have anything to do with the ETFs, but it would provide a basis
for it, and if we can get to that, we really can do a better job of
protecting consumers. Generally, when we protect consumers, we
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34
do provide some regulatory clarity, and we had a great hearing on
SPACs. You can have an ETF in SPACs, but currently nothing
with Bitcoin, so thanks a lot. My time has expired, and I yield
back.
Chairman GREEN. The gentleman’s time has expired. The Chair
now recognizes himself for 5 minutes.
Dear friends, I do have some consternation, and my consterna-
tion emanates from 2008 when I, as a member of this very com-
mittee, sat down on a lower part of the dais, and I was here when
then-Secretary of the Treasury, Hank Paulson, appeared. He sat
right out in front. I remember Representative Cleaver was to my
left, I believe, and Representative Scott was to my right. The Sec-
retary wanted $700 billion. He had approximately, I thought, 5
pages asking for $700 billion. I have since read that it was 3 pages.
Be that as it may, $700 billion to bail out what were called exotic
products at the time—$700 billion. As you can well imagine, my
constituents were up in arms. They were calling me by the hun-
dreds demanding that I vote against a $700-billion bailout. Being
the good steward that I am, I voted against it. And as I stood in
the cloakroom and I could see the tabulation of votes, there also
was a television monitor, and I could see the monitor indicating
that the vote was failing and the stock market was directly propor-
tional to what was happening with the vote. As the bill failed, the
stock market was going down. The next day, my constituents were
calling by the hundreds. ‘‘What is wrong with you? You voted
against the bailout. My 401(k) is now at risk.’’ I learned an impor-
tant lesson: Do what you think is in the best interests of your con-
stituents, even when they may disagree.
This hearing is taking place because I think it is in the best in-
terests of my constituents that we get a better understanding of
what we are dealing with. I remember Chairman Bernanke—I
have a statement from him that I would like to read, and I will
do this quickly. He said that the $182 billion bailout of American
International Group (AIG) made him angrier than anything in the
recession. AIG took risks with unregulated products, like hedge
funds—I am paraphrasing—while using cash from people’s insur-
ance policies. He said the government had no choice but to bail it
out. Who knew AIG was the glue holding the world together, the
global order together? This is of concern to me.
And, Ms. Hammer and Ms. Goldstein, if I can get to both of you,
I would like your comments on my concern. You have mentioned
FSOC. I don’t know how that will help us with a living will, for
example. This is of concern to me. How do we manage a behemoth
once it becomes so big, that if it fails, it may bring a nice sizable
portion of the economy with it? Nothing is too big to fail, but you
can be so big that if you fail, you will hurt the economy.
Ms. Hammer, let’s start with you.
Ms. HAMMER. Mr. Chairman, thank you so much for your ques-
tion, and I fully agree with your statement about the importance
of evaluating potential systemic risk where taxpayer dollars are
concerned. I often speak in my law class about the difference be-
tween an emergency response and a proactive policymaking frame-
work. And the problem with an emergency response is that it is in-
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35
herently backwards looking, and you create what is known as an
emergency state relationship between the actors.
We have the opportunity, through the FSOC and Dodd-Frank
Section 120, to create a proactive policy framework for
cryptocurrency. That means gathering and evaluating data, coordi-
nating the agencies, creating a committee that could consult with
the many States that are legislating in this area as we speak, and
consulting with international standard-setting bodies. And you
mentioned living wills, Mr. Chairman. I think that is an important
point because there are many aspects of our regulatory framework
that still need to be ferreted out and relate to cryptocurrency. And
so, I strongly believe that is the place to start and that we have
the resources to do it, and that by putting together our collective
minds, we can tackle this problem.
Chairman GREEN. Thank you. My time has expired. My apolo-
gies, Ms. Goldstein, but if you would submit comments for the
record, I would greatly appreciate it.
Dear friends, I thank the witnesses for their testimony and for
devoting the time and resources to share their considerable exper-
tise with the subcommittee. Your testimony today will help to ad-
vance the important work of this committee and of the U.S. Con-
gress in understanding and addressing the risks and opportunities
inherent in widespread investment in digital assets, including
cryptocurrencies.
The Chair notes that some Members may have additional ques-
tions for these witnesses, which they may wish to submit in writ-
ing. Without objection, the hearing record will remain open for 5
legislative days for Members to submit written questions to these
witnesses and to place their responses in the record. Also, without
objection, Members will have 5 legislative days to submit extra-
neous materials to the Chair for inclusion in the record.
Dear friends, the hearing is now adjourned, and, witnesses, I
would like to come down and thank you personally.
[Whereupon, at 12:05 p.m., the hearing was adjourned.]
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File and source
- File
- CHRG-117hhrg45360.pdf
- Size
- 21,840,190 bytes
- SHA-256
- 29fa31737c88e146ca8c65c260dfc03bf5a50f1f46f6a8b1f803ddc467ea2b50
- Our copy
- CHRG-117hhrg45360.pdf
- Original
- www.govinfo.gov