U.S Congress Plans To Establish Crypto Panel Under Financial Services Committee 

U.S Congress Plans To Establish Crypto Panel Under Financial Services Committee 

Representative McHenry of North Carolina, who heads the House Financial Services Committee under the Republican Party, is set to introduce a crypto subpanel to make better policy decisions regarding the sector. The committee will follow through on the hearings into the collapse of the FTX crypto exchange. 

Republicans in the U.S. House of Representatives are set to establish a new panel under the Financial Services Committee to ramp up their oversight and legislation around the crypto industry. In an interview given to news outlet Politico, the incoming Financial Services Chair, Representative Patrick McHenry of North Carolina, said that he wanted to create the panel because there was a “big hole” in how the former committee handled things when it came to crypto.

In the past, the Financial Services Committee was largely focused on oversight of banks, financial institutions, and their regulators like the Securities and Exchange Commission (SEC), and Commodity Futures Trading Commission (CFTC). With crypto assets gaining popularity among individuals and institutions, it has become a priority for the government to regulate the sector. 

Rep. McHenry said the panel’s primary task will be to make policy decisions regarding crypto assets by ensuring inclusivity in the financial technology, and define clear rules for federal regulators to oversee the industry. The subcommittee on Digital Assets, Financial Technology and Inclusion will be chaired by Arkansas Representative French Hill, who was in charge of the Republican party’s efforts in exploring viability of the Federal Reserve’s upcoming digital dollar, with Ohio Representative Warren Davidson, another crypto advocate in the U.S Congress, serving as Vice Chair. 

U.S Congress Plans To Establish Crypto Panel Under Financial Services Committee 

The North Carolina representative also shuffled the entire pack, naming chairs of other Financial Services subcommittees. The Capital Markets panel will be headed by Representative Ann Wagner of Missouri, and Representative Andy Barr of Kentucky will lead Financial Institutions and Monetary Policy, National Security, Illicit Finance and International Financial Institutions panel will be chaired by Missouri Representative Blaine Luetkemeyer, Representative Bill Huizenga of Michigan will chair the Oversight and Investigations committee, and Representative Davidson will head the Housing and Insurance subcommittee. 

Meanwhile, McHenry has abolished the Diversity and Inclusion subcommittee that was established by California Representative Maxine Waters, who was heading the Financial Services Committee under the Democratic Party. In place, the North Carolina Representative has installed a mandate for all subcommittees to identify best practices in their areas of jurisdiction to strengthen diversity and inclusion. 

Reforming the Financial Services Committee was one of the first legislative decisions taken by Republicans after they took control of the U.S. Congress on January 3. The new committee is expected to follow through on the hearing of Sam Bankman-Fried and his actions related to the collapse of his multi-billion dollar crypto empire consisting of FTX exchange and hedge fund Alameda Research. 

In the previous hearing held on December 13, 2022, FTX CEO John Ray, who took over the company on November 11, after Bankman-Fried stepped down from his role, revealed that FTX Trading – the crypto exchange’s trading arm – was syphoning customer funds to Alameda which were being traded or spent on personal affairs by top executives with “no internal controls and no separateness whatsoever” between the two companies. Bankman-Fried was lobbying the previous committee and working with them to introduce a more crypto-friendly regulatory environment that would have benefited bad actors like himself. 

The disgraced founder of FTX is currently under house arrest at his parents’ home in California, awaiting trial. Bankman-Fried was arrested by authorities in the Bahamas, where both his companies are headquartered, on December 11, before being extradited to the US to face criminal charges. If found guilty of all his crimes, the former CEO of FTX faces life behind bars. 

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