The United States will conduct the first review of digital asset legislation to try to determine jurisdiction

Author: Andrew Throuvalas, CryptoPotato; Compiler: Song Xue, Jinse Finance

**On Wednesday, the U.S. Congress held its first scrutiny of digital asset legislation in an attempt to establish clear jurisdiction for major U.S. market regulators. **

However, the bill has not been well received by Democrats, many of whom believe it is too friendly to the cryptocurrency industry and similar to what disgraced FTX boss Sam Bankman-Fried has advocated.

Democrats slam cryptocurrency bill

During the hearing, **House Financial Services Committee (HFSC) Chairman Patrick McHenry (R-NC) said the bill, called the Financial Innovation and Technology for the 21st Century Act, would clarify how the Supreme Court's Howey test would apply For digital assets, focus on "decentralization" and "functionality". **

Specifically,** the bill describes how digital assets can be included as part of a security contract, without necessarily being the security itself. ** The decision to amend decades-old investor protection laws to accommodate cryptocurrencies has been criticized by Rep. Maxine Waters (D-CA), who called the bill a “wish list” for the industry .

“We don’t need to invent a new regulatory framework just because cryptocurrency companies refuse to obey traffic rules,” Waters said, adding that the bill defies the views of the Biden administration and the Securities and Exchange Commission (SEC).

Waters also claimed the bill would create "loopholes" for traditional financial institutions to bypass existing requirements.

Rep. Brad Sherman (D-CA) expanded on this point, **claiming that public companies could abuse the Act by reissuing their securities as blockchain tokens, thereby making them Able to be regulated by the Commodity Futures Trading Commission (CFTC) rather than the U.S. Securities and Exchange Commission (SEC). **

“The Sam Bankman-Fried point is still in the air,” said Sherman, who suggested the bill was designed to avoid SEC oversight altogether. "That's the effective regulation that Sam Bankman-Fried is here to prevent."

Something is better than nothing

Sherman also criticized Judge Analisa Torres' recent ruling in the SEC V. Ripple lawsuit, which claimed that some instances of the company's sale of XRP tokens were securities sales, but others were not. This is not the case.

Democrats, however, are not in agreement on this point. Rep. Ritchie Torres praised the Ripple ruling and was harshly critical of the SEC’s past approach to cryptocurrencies, saying that “deregulation is dangerous” in the current system and action is necessary .

“This legislation is far from perfect, but it represents a sincere attempt to create clarity where none exists,” Torres said. “I will not let perfection be the enemy of good.