House Dems call Republican crypto market bill a ‘handout’

Crypto bitcoin covering dollar bill.

A day after Republicans introduced their crypto market structure bill, Democrats on the House Agriculture Committee have accused those lawmakers of giving “handouts” to the industry.

House Agriculture Committee Chair Glenn Thompson, R-Pa., alongside Rep. French Hill, R-Ark., and Rep. Dusty Johnson, R-S.D., introduced the Financial Innovation and Technology for the 21st Century Act Thursday.

The bill’s main focus is to grant the Commodity and Futures Trading Commission more power over crypto — namely control over digital asset commodity markets, and define crypto asset “securities” versus “commodities.”

In a series of tweets Friday, Hilary Allen, a professor at the American University Washington College of Law, questioned the “rush” for crypto regulation, given that it is not the most “pressing financial or agricultural issue facing the American public.”

House Agriculture Committee Democrats agreed with Allen in a tweet from their official account.

“Instead of focusing on pressing #FarmBill issues, House Republicans are sprinting to provide a handout to #crypto exchanges, Wall Street, and Silicon Valley venture capitalists at the expense of American consumers and retail investors,” the tweet read.

Allen, who has previously appeared as a Democrat witness during Congressional hearings, echoed a common criticism from Securities and Exchange Commission Chair Gary Gensler: Crypto does not need its own set of rules.

“It’s perfectly possible for blockchain-based businesses to comply with the securities laws, but the problem is that blockchain is not actually very good tech,” Allen wrote on Twitter.

The SEC is the proper regulator to ensure the crypto industry stays in check, Allen argued, stating that crypto companies can create assets “out of thin air (often wash traded to pump up valuation).”

Gensler’s agency needs to have an active role in ensuring “pump and dump” schemes are stopped and exchanges are handling client assets safely, she added.

The bill, while currently lacking the kind of bipartisan support required to be signed into law by President Joe Biden, does have essential backing from influential committees, including the House Financial Services Committee.