National Security In Question: SEC’s Crypto Approach Sparks Concern in Congress

In a recent interview, Ron Hammond of the Blockchain Association shed light on the bustling crypto-related developments in Washington, D.C. Hammond highlighted two significant hearings this week, one involving the Securities and Exchange Commission (SEC) and the other addressing digital assets more broadly.

Read more about this below.

Concerns Over SEC’s Approach

Speaking to Thinking Crypto, Hammond emphasized a central concern shared by several members of Congress – the SEC’s approach to cryptocurrency and private equity. Recent rules implemented by the SEC have stirred industry-wide concerns, leading to an increased focus on these issues within the Financial Services Committee. Patrick McHenry, the committee’s leader, has been a vocal opponent of the SEC’s stance.

Expanding focus

Furthermore, the Digital Asset Subcommittee, which initially concentrated on cryptocurrency, is now broadening its scope to encompass broader fintech and artificial intelligence (AI) concerns. This expansion is a response to the SEC’s heightened oversight in these areas under Chairman Gensler.

Also Read: Crypto vs. SEC: Will SEC Chair Gary Gensler Resign? Ron Hammond Weighs In

NSS’s Upcoming Hearing

The National Security Subcommittee is set to host another critical hearing, with the primary focus being on the funding mechanisms employed by Hamas for their activities. The objective is to investigate the sources of these funds and whether cryptocurrencies play a role in supporting their actions. Given the pressing nature of national security, this issue has raised concern among policymakers from both sides of the aisle.

Hammond noted, “But at the same time I mean the SBF trial  happening right now has largely kind of gone back to the sidelines. Here in terms of tension, whenever there is a major crisis, especially of national security or especially involving an ally, everything else going on, goes to the side.”

Expert Insights

Elizabeth Warren’s recent comments linking cryptocurrency to the situation in the Middle East were also discussed. While Warren has been critical of the crypto industry, the Blockchain Association has extended an invitation to her, urging her to meet with innovators, national security experts, and constituents at their upcoming policy summit in November.

The SEC’s denial of the Grayscale Bitcoin Spot ETF and Larry Fink’s comments on cryptocurrency and Bitcoin ETFs were noted. These developments have influenced policymaking, leading Congress to exert political pressure on the SEC to approve cryptocurrency-related financial products.