[{"_1":2,"_86":-5,"_87":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,75],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":72,"_73":72,"_74":72},"mediaId",6072402,"mediaKeyId","3027236-cf6388753c4d87d9753c35cf839f346c","parentId",3027236,"title","Witnesses and members warn enforcement cuts and fraud risk as Congress debates crypto rulemaking","audioSeconds",4020,"startMs",884000,"endMs",4904000,"viewUrl","/Search/View?dp=1&key=3027236-cf6388753c4d87d9753c35cf839f346c&start=884&end=4904","thumbnailUrl","https://assets.pipeline.soar.com/3027236-cf6388753c4d87d9753c35cf839f346c/thumbnail_884000.jpg","articleUrl","/articles/6072402/Witnesses-and-members-warn-enforcement-cuts-and-fraud-risk-as-Congress-debates-crypto-rulemaking","mediaUrl","https://secure.pipeline.soar.com/6072402-f17da4f583b26bac8102a473fd5cd5f0/orig.mp4?Expires=1770753223&Signature=MxXW13o91gCxi03Wz6Gux6CWxaN1H7GAnx~hFCv0ovNCGS9IkdEGI53QtUHBMgRz7trhISakTgAk0uY0Rpay6mDwA20ppLFUu-jcmuv3sOHxjaXDmHPr0F9LWnVJ1EfqJW2XUSjGJ-M2sKx8KCNRupbj7HJEjh55r~QkOFg52~gk1GeOkFIFL02yyLiCaYaqAz9pVs~0SzCUr8j271g99yEcUn7CWRwzPWZEdQ0eooM4Ca4UQaEZ6Tf62oSJE0lLVOnY8VHMI3I8le3k2l-VJdR6ex3mGoJGXxeB0Ov-oa2DfZHmMgu7V14omWwjqo4e9MzDeDnUDX-vZ1vJC2gDyQ__&Key-Pair-Id=KUT5TJCACFTXG","author","U.S. House Committee on Financial Services","date","2025-04-10T04:23:10Z","article","During the subcommittee hearing, several members and witnesses raised concerns about a reduction in federal enforcement focused on cryptocurrencies and the continuing presence of fraud, thefts and market abuses in the digital‑asset ecosystem.

Ranking Member Lynch and others said recent agency moves — including a Justice Department shift away from a dedicated cryptocurrency enforcement team and statements limiting SEC oversight in certain cases — raise urgent questions about investor protection and conflicts of interest. Lynch cited investor harms and companies that have faced allegations or enforcement, naming crypto platforms that have been the subject of prior enforcement actions.

Alexandra Thornton of the Center for American Progress told the panel that “significant risks are at stake,” listing large price swings, billion‑dollar hacking losses and frauds that have harmed investors. Thornton referenced the 2022 crypto‑industry crises and warned that weakening rules or enforcement could create systemic risks that spill into traditional markets.

Several members pointed to specific episodes discussed in the hearing transcript: the collapse of FTX and related firms, continuing hacks and alleged frauds, and the public controversy over “meme coins.” Witnesses and members noted that a staff statement the SEC issued in late February indicated that some meme coins and certain mining activities were not within the agency’s securities jurisdiction, producing confusion about investor protections.

Members pressed witnesses on practical consequences. Thornton and others warned that if tokens or tokenized products escape securities rules while economically similar instruments remain regulated, markets could bifurcate and create arbitrage and regulatory arbitrage risks. Witnesses also emphasized that many fraudulent token issuances and wash‑trade patterns have required blockchain analytics and cross‑agency investigations to trace flows.

Witnesses and some members urged Congress to ensure that any new statutory framework does not hollow out enforcement capacity. Thornton recommended strengthening oversight and cautioned against dismantling units focused on crypto fraud; other witnesses said clearer statutory jurisdiction could help agencies pursue misconduct more effectively.

The hearing record shows members requested written follow‑up from witnesses and reserved the option of drafting statutory protections and enforcement provisions as part of the forthcoming discussion draft on market structure.","mediaType","Video","parentTitle","American Innovation and the Future of Digital Assets: Aligning the U.S.... (EventID=118116)","oneSentenceSummary","Lawmakers and experts at the subcommittee hearing flagged recent enforcement changes and continuing fraud, theft and market‑integrity problems, urging Congress to preserve protections while crafting a new regulatory framework.","taxTitle","Financial Services: House Committee, Standing Committees - House & Senate, Congressional Hearings Compilation, Legislative, Federal","taxId",1981,"location","","headline","shortSummary",{"_33":76,"_35":36,"_37":38,"_39":77,"_41":78,"_43":79,"_45":79,"_47":80,"_49":81,"_51":82,"_53":83,"_55":56,"_57":58,"_59":84,"_61":62,"_63":64,"_65":85,"_67":68,"_69":70,"_71":72,"_73":72,"_74":72},6072407,"House subcommittee opens push for comprehensive digital-asset market-structure legislation",0,549000,"/Search/View?dp=1&key=3027236-cf6388753c4d87d9753c35cf839f346c&start=549&end=549","https://assets.pipeline.soar.com/3027236-cf6388753c4d87d9753c35cf839f346c/thumbnail_549000.jpg","/articles/6072407/House-subcommittee-opens-push-for-comprehensive-digital-asset-market-structure-legislation","https://secure.pipeline.soar.com/6072407-a3063c8c7948acf19177d03991b1ff5b/orig.mp4?Expires=1770753223&Signature=oyM80FMtM6tT3hGtQl6WQ-qQPYOfEeRQ4oSDF-KTI5Fq3lSging~zpZCfTBHgl2JJGnUWT~7Gc5MThsGksiuzEAImrs64vhubgkJaMf2YhUEcBxflIQhbYGT0dGUvuemakWvm7OJwg5uNyjnbgB7aLfgyIllmFqhaqtZenOOSQ--TIxNPEPbvw3tg4nwcPd3eAcXXiEWpX2f2B8tjoWd6-e0yaQM3sZ0q7fXR1ys63NxWkRwb7TRy60huIJL~AsVUoad7nVuascQB58x48j3CzlAXk8zM6udR3L2pV8G8FS8Eq~-Fnkbiy5GgIWFcwoyvMu25els6r6fR3R8RLOPUg__&Key-Pair-Id=KUT5TJCACFTXG","The Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence convened a hearing titled “American Innovation and the Future of Digital Assets, Aligning the US Securities Law for the Digital Age,” opening a multiweek effort to craft market-structure legislation for digital assets.

At the hearing, Subcommittee Chairman Stile said the panel will “examine what aspects of the ecosystem are implicated by securities laws and analyze the challenges of applying these laws,” and pressed for legislation to provide clear rules for issuers and intermediaries. Ranking Member Lynch and other Democrats warned that legislative changes could lower investor protections and criticized recent agency actions and enforcement reductions.

Witnesses gave sharply different prescriptions. Rodrigo Seira, special counsel at Cooley, argued the existing securities-law framework is “not fit for purpose” for many digital assets and urged a new regulatory approach tailored to network tokens and decentralized protocols. Seira said the securities-registration regime forces projects into an unsuitable disclosure framework and “virtually no crypto projects have successfully registered their tokens under federal securities laws, and lived to tell the tale.”

Tiffany J. Smith, partner at WilmerHale, told the subcommittee that congressional action is needed for “true regulatory clarity,” describing three priorities: clarifying when federal securities laws apply, giving practical guidance on compliance when they do, and ensuring that agency patchwork does not leave important markets unregulated. Smith said the SEC’s prior guidance was inadequate and that tailored disclosure rules should account for crypto-specific features such as governance, tokenomics and cybersecurity.

Jacob Waren, chief legal officer at Polygon Labs, framed technological benefits for users and developers, asking lawmakers to consider how decentralization, self‑custody and 24/7 settlement differ from traditional markets. Waren said decentralization “is inherently democratic” and argued the U.S. risks losing developers and projects to jurisdictions that offer clearer rules.

Alexandra Thornton, senior director for financial regulation at the Center for American Progress, emphasized risks, including volatility, thefts, and frauds that she said have already caused large investor losses. Thornton urged lawmakers to preserve core capital-markets protections and to avoid creating regulatory loopholes that could destabilize traditional markets.

The hearing highlighted familiar divides the committee must reconcile: whether to treat some digital tokens as securities and subject them to existing disclosure and intermediary rules; how to adapt custody rules for native digital assets; and how to align SEC and CFTC jurisdiction for spot markets, derivatives and tokenized real‑world assets. Several members referenced FIT 21 and last week’s STABLE Act as building blocks for a broader market-structure bill.

Lawmakers pressed witnesses on practical questions—how projects form and finance, how settlements and trading hours differ from securities markets, and what a workable disclosure regime would look like. Multiple witnesses said the current Howey-based analysis is hard to apply in the digital context and called for legislative clarity or a refreshed taxonomy.

The subcommittee did not take formal legislative action at the hearing. Members said they expect continued markups and drafting to follow and gave witnesses and staff time to produce technical proposals for possible statutory language.","A House Financial Services subcommittee hearing featured sharply contrasting views on how to classify and regulate digital assets, with witnesses urging a tailored, technology-aware regulatory framework and some members warning of reduced investor protections and enforcement cuts.","actionData","errors"]

Article not found

Witnesses and members warn enforcement cuts and fraud risk as Congress debates crypto rulemaking

House subcommittee opens push for comprehensive digital-asset market-structure legislation