CryptoLink - November 2022

This edition of CryptoLink follows the 2022 U.S. midterm elections, and lawmakers in Congress are now outlining ambitious agenda priorities for next Congress, putting digital assets near the top of the list. Following the FTX collapse and other high-profile liquidity-related issues in the crypto markets, U.S. investigators have re-doubled enforcement efforts and multiple congressional committees of jurisdiction have scheduled or expressed interest in hearings to address the continued volatility and recent business failures. On the legislative front, it is widely expected that the Stabenow-Boozman Digital Commodities Consumer Protection Act (DCCPA) will serve as the primary basis for crypto legislation in the new Congress, which officially begins on January 3, 2023. The DCCPA identifies the Commodity Futures Trading Commission (CFTC) as the primary regulator for the cryptocurrency space. It is probable that the bill is significantly modified in the new Congress and may include key provisions of the Lummis-Gillibrand Responsible Financial Innovation Act (RFIA). It is expected that the Senate Agriculture Committee will be the main Committee for legislative activity in the 118th Congress, increasing the likelihood that the CFTC will be chosen as the chief regulator in any legislation. Additionally, both the House Financial Services Committee (HFSC) and Senate Banking Committee (SBC) may focus their legislative efforts on stablecoin regulations, following the announcement of bipartisan efforts by Sens. Cynthia Lummis (R-WY), Kirsten Gillibrand (D-NY), retiring SBC Ranking Member Pat Toomey (R-PA), current HFSC Chairwoman Maxine Waters (D-CA) and Ranking Member Patrick McHenry (R-NC) to craft such bills before the end of the year.