'How the hell are we going to tackle this?': Lawmakers flummoxed as they continue push for crypto legislation before October
Quick Take “Congress can’t even agree on basic legislation dealing with privacy on the internet — how the hell are we going to tackle this?” Sen. John Kennedy said Wednesday. Sen. Tina Smith said lawmakers need to ensure consumers are protected, not just put forward a “stamp of legitimacy” over the industry.
Lawmakers will have to contend with how to define cryptocurrencies, address President Donald Trump's crypto interests, and ultimately finalize rules for the industry, all before a self-imposed Sept. 30 deadline.
During a Senate Banking Committee hearing on Wednesday titled "From Wall Street to Web3: Building Tomorrow's Digital Asset Markets," Sen. John Kennedy, R-La., said he agreed that digital assets needed different rules than more traditional finance, but compared the situation to trying to write rules for the internet as a challenge.
"Well, we let the current generation of the internet draft their own rules, and frankly, it looks like what we got as a result looks like somebody knocked over a urine sample," Kennedy said. "Congress can't even agree on basic legislation dealing with privacy on the internet — how the hell are we going to tackle this?"
And lawmakers are trying to tackle drafting sweeping rules for the crypto industry in hopes of getting something done in the Senate in the coming months.
Republican Sens. Cynthia Lummis, Thom Tillis, and Senate Banking Committee Chair Tim Scott released principles for market structure legislation last month. Those principles include a Securities and Exchange Commission exemption for "certain digital asset fundraising" and requirements that customers' funds are protected during bankruptcy proceedings. At the time, Scott said he wanted to advance that legislation by the end of September.
The House has forged ahead with its version of a market structure bill through the Clarity Act. The bill looks to create a clear regulatory framework for crypto in part through designating how the SEC and the Commodity Futures Trading Commission will regulate. Two pivotal committees passed the bill, teeing it up for the full House for a vote next week.
Sen. Tina Smith, D-Minn., said lawmakers need to ensure consumers are protected, not just put forward a "stamp of legitimacy" over the industry. Smith took issue with a part of the Clarity Act that she said would block any digital asset from being regulated if it resembled a collectible or art, or has utility.
"That seems like a pretty big loophole to me," Smith said.
It's unclear exactly what would be categorized as digital commodities under the act's definition, said Timothy Massad, former chair of the CFTC and testifying at the hearing. That definition seems to encompass bitcoin and other native tokens, but said hundred of other listed tokens may not be regulated.
"The question is, how many of those would be regulated by this?" Massad said. "I think it would only be a handful — that's a real problem."
President Donald Trump's crypto interests came up again during Wednesday's hearing. Many Democrats have criticized Trump's ties to World Liberty Financial's DeFi and stablecoin project, and from the TRUMP and MELANIA memecoin launches. Bloomberg reported that Trump profited some $620 million in recent months from his crypto ventures.
In prepared remarks , Sen. Elizabeth Warren, D-Mass., said legislation should "shut down the president's crypto corruption" by blocking public officials, including the president, from issuing, profiting, and sponsoring tokens.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
AI investment enters the "Trough of Disillusionment", the next 18 months will be a life-or-death test!
Goldman Sachs believes that the AI investment cycle is currently in the "trough of disillusionment," but this is not the first time. The core contradiction lies in the fact that the business models of new cloud computing providers are highly dependent on end-user returns from AI spending, while currently "there are basically zero companies that can attribute profits to AI." Social Capital founder Palihapitiya has clearly defined an 18-month key window, during which the market will decide which AI business models are sustainable and which are not.
Anthropic's Core Concern: Revenue Can Be Withdrawn at Any Time, but Computing Power Costs Are Locked in for up to 20 Years
Zheshang Securities believes that Anthropic's revenue is mainly based on usage-based billing, with remaining performance obligations covering only about 5.1 months of annualized revenue, while compute power costs are already locked in with $895.4 billion in irrevocable commitments, some extending as far as 2045. Revenues can be reduced at any time, but costs are non-exitable, creating a highly asymmetric maturity gap between the two—this is the company's real core constraint.
Triple Pressure from the Federal Reserve, Treasury, and Congress; Goldman Sachs: Liquidity Crisis May Occur in 2027
Goldman Sachs warns that the reserve ratio of bank assets has dropped to around 11%, only slightly above the crisis trough of 2019. In the second half of 2027, a deadlock in debt ceiling negotiations will force the Treasury to rebuild the TGA, triggering a "perfect storm" of a sharp drop in reserves and a surge in T-bill supply; combined with stalled money market fund buying, this will create a huge liquidity black hole. The Federal Reserve could be forced into the awkward position of lowering interest rates and launching large-scale bond purchases to rescue the market.
Crypto prices
More
