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<p class="is-style-lead">Amid recent lawsuits by the Securities and Exchange Commission (SEC) against cryptocurrency exchanges Binance and Coinbase, the House Agriculture Committee convened a hearing to discuss the regulation of cryptocurrency spot markets.</p>



<p>In the wake of lawsuits filed by the Securities and Exchange Commission (SEC) against prominent cryptocurrency exchanges <a href="https://crypto.news/sec-sues-binance-and-cz-for-securities-violations/" data-type="URL" data-id="https://crypto.news/sec-sues-binance-and-cz-for-securities-violations/">Binance</a> and <a href="https://crypto.news/sec-sues-coinbase-just-hours-after-binance/" data-type="URL" data-id="https://crypto.news/sec-sues-coinbase-just-hours-after-binance/">Coinbase</a>, the U.S House Agriculture Committee convened on June 6 for a twin panel hearing on the regulation of cryptocurrency spot markets.</p>



<p>Leading off the proceedings, Chair of the Commodity Futures Trading Commission (CFTC) Rostin Behnam fielded questions from lawmakers, paving the way for a second panel comprised of cryptocurrency industry professionals and past CFTC executives.</p>



<p>During his session, Behnam centered his commentary around the need for categorical clarity for cryptocurrency tokens, the existing practice of regulatory enforcement, and a call for clear regulatory guidelines. </p>



<p>Over the course of the preceding week, the SEC had classified a dozen tokens as securities in their legal cases against <a href="https://crypto.news/sec-sues-binance-and-cz-for-securities-violations/" data-type="URL" data-id="https://crypto.news/sec-sues-binance-and-cz-for-securities-violations/">Binance and Coinbase</a>.</p>



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<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">SEC sued binance yesterday<br><br>Today the SEC sues coinbase<br><br>Who will the SEC sue tomorrow</p>&mdash; borovik.eth (@3orovik) <a href="https://twitter.com/3orovik/status/1666125462517563392?ref_src=twsrc%5Etfw" target="_blank" rel="noopener">June 6, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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<p>Representative Dusty Johnson, a Republican from South Dakota, probed whether the SEC should exclusively govern digital assets. </p>



<p>Responding to Johnson&#8217;s question, Behnam insisted that the issue was not a case of either/or. He emphasized that any potential legislative or legal power the CFTC might accrue would not detract from another party. Behnam pointed out that a regulatory void exists over digital commodity assets.</p>



<p>On the topic of the SEC&#8217;s jurisdiction, Behnam stated that the SEC should preside over assets classified as securities. He reinforced the view that the world&#8217;s largest token, <a href="https://crypto.news/price/bitcoin/" data-type="URL" data-id="https://crypto.news/price/bitcoin/">bitcoin</a>, classified as a commodity by a U.S. court, remains unregulated under U.S. law.</p>



<p>Behnam expressed the urgent need for extended authority for the regulatory body over the cryptocurrency commodity sector, noting that few exchanges list assets formally identified as commodities.</p>



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<p>Many lawmakers voiced their apprehensions regarding the pattern of <a href="https://crypto.news/the-sec-and-crypto-regulation-why-the-delay-in-rulemaking/" data-type="URL" data-id="https://crypto.news/the-sec-and-crypto-regulation-why-the-delay-in-rulemaking/">regulation</a> through enforcement currently employed in the United States. &#8220;Regulation by enforcement does not sufficiently protect customers, foster market stability, or stimulate innovation,&#8221; asserted Committee Chair Glenn Thompson, a Republican from Pennsylvania, during his formal statement.</p>



<p>When asked by Representative Jim Govern, a Democrat from Massachusetts, about the potential repercussions of this regulatory pattern, Behnam highlighted the CFTC’s enforcement record, including 82 cases over eight years from an agency without regulatory authority. </p>



<p>Behnam further asserted that the issue is not the CFTC or SEC taking <a href="https://crypto.news/crypto-lawyers-speculate-on-xrps-classification-in-sec-lawsuit/" data-type="URL" data-id="https://crypto.news/crypto-lawyers-speculate-on-xrps-classification-in-sec-lawsuit/">legal action</a> against entities violating the law, but rather the necessity for enhanced congressional authority to manage crypto-associated risks and establish definitive regulations.</p>



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<p>Warning of potential financial instability, Behnam noted, &#8220;As the <a href="https://crypto.news/market-cap/" data-type="URL" data-id="https://crypto.news/market-cap/">cryptocurrency market</a> size fluctuates and has mostly stabilized in the last half-year, if it starts to grow, we could be facing serious financial stability concerns.”</p>



<p>This committee hearing unfolded hot on the heels of the SEC announcing charges against Coinbase for purported breaches of securities laws. This accusation followed similar charges against Binance, the globe&#8217;s biggest exchange, a day prior.</p>



<p>Tuesday&#8217;s second panel included prominent figures such as Coinbase chief legal officer Paul Grewal and Robinhood’s chief legal compliance and corporate affairs officer, Dan Gallagher, alongside former CFTC chairs and commissioners.</p>



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US House Agriculture Committee holds hearing on crypto regulation amid SEC lawsuits

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