▶ 0:20:31The meeting will come to order. I note that a quorum is present, that each member has before them copies of material on our agenda today at their place on the rostroom. Without objection, the chair may recess committee subject to the call of the chair at any point during the meeting. Good morning everyone. That's a pretty good response. I like that. You must all had coffee this morning.
▶ 0:20:54Uh the uh today the committee will consider HR3633 the digital asset market clarity act or the or the clarity act. At our first hearing on digital asset in 2018, Chairman Conway said, "How we regulate digital assets and those who develop them won't determine if they are developed and used, but it will determine if they are developed and used in our country.
▶ 0:21:20For the past eight years, this committee along with our partners at the Financial Services Committee have worked tirelessly to build a regulatory framework that will ensure the digital assets are developed and used here in the United States. Last Congress, we got closer than ever before. House Financial Services Chairman Mckenry and I agreed to embark on a historic joint effort to work collaboratively and craft a comprehensive digital asset market structure framework.
▶ 0:21:46This year, we will complete that work and finally build a framework which will protect customers and promote innovation in digital asset markets. with Chairman French Hill leading the financial services committee of this Congress. Uh we continued that partnership between the two committees. It started with education and understanding how digital assets fit and do not fit into existing regulatory regimes.
▶ 0:22:10From our roundts, briefings and hearings, we learned that federal laws and regulations provide few rules of the road for those who want to engage in the with these emerging technologies, leading to complicated enforcement actions by regulators and creating further confusion in the industry and the market. Through this process, we brought in a broad cross-section of stakeholders from industry to regulators to the table. stakeholders underscored the importance of a regulatory framework.
▶ 0:22:39Without one, America will not lead and innovation will be lost. And we we have already seen this for over the last over the last four years. Ultimately, we are left with one inescapable conclusion. Congressional action is needed to bring these assets under federal oversight.
▶ 0:22:56Federal oversight will ensure that customers in every state are afforded the same comprehensive protections and that Americans can innovate, develop, and build with digital assets free from the fear of federal enforcement actions. I'm thankful today that that the president and his administration has made digital assets and their associated benefits a primary policy focus. I appreciate all agencies which provided technical assistance.
▶ 0:23:22The Clarity Act provides certainty on digital assets to market participants, fills regulatory gaps at the Commodity Futures Trading Commission and the Securities and Exchange Commission, bolsters American innovation, and brings needed customer protections to digital asset related activities and intermediaries. I want to thank Chairman Hill and Style for on financial services for their partnership and chairman Dusty Johnson and our committee for being a leader on this issue for years.
▶ 0:23:51Also want to thank the ranking member of the full committee, Miss Craig, and ranking member Davis, for working with us and being original co-sponsors of this bill. I'm so proud of this committee leading by example with bipartisanship on this issue. Years of work by many people have brought us here to this point to deliver for the American people. I look forward to doing just that and getting another step closer to digital asset market structure with today's markup.
▶ 0:24:17I now recognize a distinguished ranking member, the gentle lady from Minnesota, Miss Craig, for any opening remarks that she may have. Well, thank you so much, Mr. Chairman. Last year, an estimated 55 million American adults held or used cryptocurrency for financial transactions, and that number is growing annually at a rapid rate. This number will continue to grow whether Congress acts or not.
▶ 0:24:44But if we don't act, it will grow without the consumer protections that retail investors need and deserve. Protections like those that govern other corners of the American financial system. Congress has a responsibility to put a market structure with guard rails in place to help keep the American people's investments safe from fraud and undo financial risk. The Clarity Act is not a perfect bill, but it's an important step forward.
▶ 0:25:14There are significant concerns still that I hope during this markup today we'll be able to mitigate. It does, however, take the first step toward putting in place the consumer protections that digital assets markets currently lack, like disclosures and sequestering consumer funds to protect retail investor deposits from being In addition to protecting retail investors, the companies operating in this space need clear rules of the road to make sure that responsible growth,
▶ 0:25:45the ability to innovate, and accountability are all part of the mix. I do want to offer a couple of areas of concerns as we consider this legislation. Former CFTC Chair Russ Benham has testified that the agency would need at least 120 million over three years to fully implement this law and have the infrastructure in place for the CFTC to be successful.
▶ 0:26:10I would point out to House AD committee members that the Appropriations Agriculture Subcommittee last week cut the CFTC's budget by $30 million. While the bill provides for registration fees, those fees mean nothing if appropriators reduce the total funding level for the agency. I would like to make sure that we are all align that more resources will be required.
▶ 0:26:35Second, as written, there is no prohibition in this law preventing the president and vice president from using non-public information of these markets for personal profit or from sharing such insider information with others. so those close to them can profit.
▶ 0:26:52The bill does however move to prohibit members of Congress along with federal judges, our collective employees, and executive branch employees from using non-public information acquired from doing our jobs for our own personal benefit. We have an opportunity to fix that during our markup today. With that, Mr. Chairman, thank you and I yield back.
▶ 0:27:18Uh I would uh recognize myself for five minutes to make an uh some opening remarks. Uh over the last two years, every single witness we have had in this committee room, whether they were uh from one party or the other, regardless of their background, uh regardless of their experience, have acknowledged that uh there is a spot market gap.
▶ 0:27:39that an uneven patchwork of uh regulation by enforcement and unclear rules has stifled innovation has endangered consumers and has pushed investment uh That's not a strategy. That's a Today that all changes. Today we get clarity. This bill does eliminate that spot spot market gap.
▶ 0:28:05This bill does clearly delineate the roles of the CFTC from those of the SEC. This bill does protect consumers and investors uh as the ranking member said by requiring much needed disclosures and customer fund segregation. This bill positions America to be the global leader in developing and implementing web 3.
▶ 0:28:28This bill unlocks the technologies that American small businesses and entrepreneurs will increasingly need to power their new ideas and their bold I'll mention u a note or two about process. The clarity act is the product of years of thoughtful bipartisan work. GT and French along with Mr.
▶ 0:28:51style and myself uh and our colleagues have showed great leadership in engaging stakeholders in dozens of conversations to improve this product. I do want to mention my colleagues on the other side of the aisle. Rather than play politics and turn their backs on this process, ranking member Craig, ranking me member, ranking member Davis, and so many of their colleagues viewed themselves as partners in improving this legislation across um across the last two years.
▶ 0:29:22That kind of bipartisan work is not common in this town. Uh and the kind of collaboration we had with financial services is not common in this town. I'll close by saying I don't have any idea what innovators will create over the course of the next five or 10 or 20 years.
▶ 0:29:41But I do know that the actions we take today the clarity that we will is going to do a great deal to empower those new solutions and those bold visions and will help transform most every industry.
▶ 0:29:58With that, I would yield and note that the bill HR 3633, the Digital Assets Market Clarity Act of 2025, is now before the committee for consideration and without objection, a first reading of the bill will be waved and it will be open for amendment at any point. I would like to remind members that only those sections of the bill that fall within the agricultural committee's jurisdiction will be considered and open to amendment and only amendments gerine to this subject matter before us shall be in order.
▶ 0:30:27Without objection, we'll vote on amendments using an electronic voting system. I now recognize uh myself to offer an amendment in the nature of a substitute on behalf of the chairman GT Thompson to HR 3633 and in addition a manager's amendment to the substitute which are both at the desk. These amendments make targeted changes only to sections of the bill within the jurisdiction of the agricultural committee. These changes are reflective of member and stakeholder input and technical assistance from the CFTC.
▶ 0:30:58Without objection, the reading of the amendments are waved and the substitute, including the changes made to it by the manager's amendment will be considered as original text for the purposes of further amendment. And with that, uh, if anybody would like to make comments, uh, we'll recognize members for their five minutes. Yes, the gentleman is recognized. Thank you, Mr. Chairman. Uh, uh, it's great that we're all here today to discuss this really important piece of legislation.
▶ 0:31:26Uh blockchain and digital assets are no longer emerging technologies. They're here and they're already reshaping how people interact with a financial system. Congress has a responsibility to make sure that we get this right or as right as possible. That means creating a path forward that supports innovation and ensures the United States remains competitive and becomes more competitive in a fastchanging global economy. but also means putting in place clear, fair rules that protect consumers like working families and novice crypto users.
▶ 0:31:56That can't that can't happen if these technologies are left unchecked. People in my district, many who live paycheck to paycheck, can't afford to be misled by bad actors or to lose their savings to an unregulated market. But they also deserve new ways to invest and be part of a financial system that is fair and gives them the new ways to take personal control of their own finances. We've seen the damage that can happen when industries operate without oversight, and we can't repeat those mistakes in the digital asset space.
▶ 0:32:24There's real potential here, not just for profit, but for progress for everybody. From streamlining international payments to increasing access to capital and underserved communities. Blockchain has the potential to make our economy more inclusive and more efficient, but only if we build a foundation of trust and accountability. I'm glad this committee is having this conversation. The stakes are high and the decisions we make today will shape the future of this industry for years to come. Thank you, Mr. Chairman. I yield back. Gentleman yields back.
▶ 0:32:53Now recognize gentleman from Iowa, Mr. Nun, for um remarks. Well, thank you, Mr. Chairman, and thank you to the members of this committee today. I rise today in support of the Clarity Act. As a member of both the House A committee as well as the House Financial Services, I've had the privilege of working on the subcommittee and the two committee chairs. It's as you say, Mr. Chairman, strange that not only Democrats and Republicans are working together on this, but that a and financial services can be able to work together on this.
▶ 0:33:22I want to highlight that here in rural Iowa, my home state, we understand commodities. We know corn, soybean, and hogs. And the CFTC is truly an expert when it comes to a trusted regulator for these vital markets. A few miles away in downtown De Moine, our financial institutions handle stocks, bonds under the SEC supervision.
▶ 0:33:45The clear division works well, and that's what this clarity bill helps to do for our traditional markets as well as our future markets in the digital asset space. As digital asset models change, they have blurred the lines though and created a regulatory maze for many who want to be able to come into this space. That confusion lives leaves businesses unsure where to turn. investors vulnerable and innovation slipping away. At the core of this problem lies a fundamental question.
▶ 0:34:13What is a security and what is a commodity? This question seems simple, but it can get complicated really quickly when you start throwing real world examples out there. Let's consider ether. Think of it, I'll use my Iowa term, as a pork chop. By itself, ether behaves like a commodity, corn or soybean. But when its creators raise enough capital through the initial coin offering, they wrap it in a structure that resembles a security. So now we have a pork chop wrapped in delicious bacon.
▶ 0:34:43I think we can all get behind this. But still, the underlying asset of ether remains a commodity. Even though the bacon is the wrapper around it, it's temporarily made a security through part of the transaction. Now that project has matured beyond its fundraising phase, and the wrapper begins to be removed. We can eat that bacon now and still have the pork chop for later. Ether trades and functions as a commodity.
▶ 0:35:07Once again, just like when the pork chop was unwrapped, it's still a pork chop and can be traded under the CFTC. The Clarity Act addresses this exact type of scenario. It introduces a maturity test that clearly defines when an asset is a commodity and places it squarely under the CFTC's jurisdiction. This clarity is more than just legal jargon or delicious uh pork.
▶ 0:35:31This is the reality that we need to be able to have for clarity moving forward on when something goes from the SEC to the CFTC. Blockchain projects need this certainty for confident to be able to confidently raise capital and expand beyond their businesses, innovate in new applications, and create good paying jobs right here in America. Mr. chair to our ranking members. I believe we must empower the CFTC to take on this responsibility. They have done it for hundreds of years.
▶ 0:36:02By clarifying the CFTC's jurisdiction, we give the American regulator the equipment and the expertise as well as the flexibility and the principles-based approach they need to oversee a rapidly evolving digital asset ecosystem. If we fail at this, it risks Americans losing jobs, America losing innovation, and the ability for other countries to take lead in this.
▶ 0:36:27Not just the Singapores, the Londons, the others who may be moving in the right direction, but also those nefarious actors in Beijing, Moscow, and Tran which are already moving in this direction. Today, the era of uncertainty can end with us. The era of turf battles needs to be over. The innovative spirit of America looks to this committee and financial services to be able to drive success. Now is the time, Mr. Chair. America can lead.
▶ 0:36:56I urge my colleagues to help support this Clarity Act. With that, I yield my time. Gentleman yields back. Now recognize Mr. Davis North Carolina for five minutes. Thanks so much, Mr. Chair, and to the ranking member um for your leadership. And I want to recognize also um Chairman Johnson for our subcommittee. We spent a lot of time together and I'm sure we'll continue to spend quite a bit of time together.
▶ 0:37:25And I want to also um pause here and recognize the staff. And when I say the staff, that's both the majority and the minority staff just just really spent a lot of time going over this bill inside and out. Um, I would say we've put in a lot of hours um to get us here um to get this landmark legislation ultimately across the finish line and that's what we're trying to do here and that's what we're going to do.
▶ 0:37:54I'm glad to co-lead the clarity act. We took fit 21 from the last Congress and we knew we had to move forward with improvements. I believe this is that I've spent countless hours meeting with different industry groups, both digital and traditional consumer protection groups and frankly anyone that wanted to talk. Um throughout those meetings, common themes emerged.
▶ 0:38:18Um one the need for certainty in the industry, two clear standards, regulations and processes for operating, three, protecting consumers. and four the fear that if we do not do something to set up a market structure then foreign nations will determine the future of this industry. Um this legislation sets clear rules of the road for the digital ass uh for digital asset and commodity uh the commodity industry.
▶ 0:38:48It sets up a market structure that works for industry and consumers and ensures that this next generation industry is not left with uncertainty of whether they can operate in the United States or not. It protects consumers and ensures that anyone who breaks the law or goes against regulations that are set up will be punished.
▶ 0:39:09If consumers want to participate in digital asset or commodity markets, we want them to feel safe and sure that they can participate and not face scams or lose their savings. Further, in communities like mine and eastern North Carolina, which really brings me into this space, uh we want to work to eventually address concerns of the under and the unbanked.
▶ 0:39:34um those who are not able to participate perhaps even in traditional market um financial markets. Uh this allows these individuals to take their finances in their own hands to provide a better future for themselves and their families. The CLA act guarantees that the United States will be the world leader in the cryptosphere. The Clarit Act is imperfect.
▶ 0:39:57However, it has gone through numerous rounds of edits to try to make it better and to get it to the best point and to get and to get us here. I want to simply say this, the time is now, right now to get this We already have and we're moving in a bipartisan way.
▶ 0:40:24We need to continue to keep it moving in a bipartisan way and it's time for us now to meet this moment in time. Thank you so much, Mr. Chair, and I yield back. Gentleman yields back. And I'll recognize myself for five minutes. Uh, as with any legislative product, our best policy are those that we work on together.
▶ 0:40:46This ANS is a culmination of countless meetings and discussions with Republicans and Democrats, federal agencies including the CFTC and the SEC, market participants and industry stakeholders. All these groups provided their feedback as we work to refine our legislative product. Among its many provisions, the Clarity Act provides the CFTC with jurisdiction over digital commodities, drawing the line between the CFTC and SEC jurisdictions.
▶ 0:41:12Establishes a process to permit the secondary market trading of digital commodities if they were initially offered as part of an investment contract. Uh contains strong consumer protections by requiring customers fund segregation and important disclosures and order studies on topics like decentralized finance and market infrastructure so we can always seek to improve. The ANS provides some enhancements building off the introduced text.
▶ 0:41:43This ANS contains additional feedback received since Clarity's introduction. Uh the digital commodities definition now ensures properly scoped exclusions. This is a vitally important Section 413 addresses quote other tradable assets end quotes directly addressing the treatment of other types of digital assets and ensuring that they are subject to the same protections and digital commodities when traded on registered platforms.
▶ 0:42:13This bolsters consumers protections in the bill by prohibiting exchanges from listing deceptive or fraudulent tokens, ensuring they do not find themselves in the hands of vulnerable customers. And finally, the ANS also includes a manager's amendment which executes a number of additional amendments offered by committee members last night. Particularly, I'd like to thank Miss Bodzinski, Mr. Figures, Mr. Costa, and Miss McClan Delaney for working with us to assemble this manager's amendment.
▶ 0:42:43I'd also like to highlight that the manager's amendment contains important subsections related to implementation of expedited registration process in section 106 to ensure that the CFTC is prepared to accept the new firms required to register with the commission within 270 days required by law. Finally, this amendment contains important protections for uh additional derivative markets.
▶ 0:43:12As always, I'm pleased on how this committee can operate in a bipartisan fashion. And with that, I yield back and recognize the ranking member for five minutes. Thank you, Mr. Chairman. Uh I would just like to u say thank you for the um opportunity for the minority to provide input into the ANS. There were a number of significant changes over the course of the last 72 hours that we appreciate you working with us on.
▶ 0:43:39In addition, the manager's amendment does reflect three of the amendments that were offered uh by members of the committee here today and we appreciate that as well. As I said in my opening remarks, uh this is not a perfect bill. I still think that we could make some improvements uh to it and I hope that we'll continue this ongoing and productive dialogue um all the way uh past markup here today to the house floor. So with that, Mr. Chairman, I yield back. Thank the gentle lady. Now recognize gentleman from Alabama, Mr.
▶ 0:44:10Faggers, for five minutes. Thank you, Mr. Chair. Thank you, ranking member. Also want to give a special thanks to subcommittee chair Mr. Johnson and and subcommittee ranking Mr. Davis. Uh you guys got us here and as I was a candidate for office dreaming of what Congress would be like to serve in this this this is what the fantasy land looked like. Um it looked like people coming together uh bringing different ideas, different priorities to the table.
▶ 0:44:40Um you get a little bit of what you want, get a little bit of what you don't want. Um but you ultimately come up with um a piece of legislation uh that is something we can all live with and something that is necessary and something that puts us in a place um of of progress. And so I think we are we are in fantasy land today. So I want to thank all of you guys for that. Um I want to also thank House ad committee in general and and House Financial Services Committee for working together on the clarity act.
▶ 0:45:08uh this is a very meaningful step forward in giving the digital asset market a clearer regulatory structure and I appreciate the the bipartisanship um that we did in this complex issue. I also want to thank the staff as I've said in hearings um this is complex stuff. This is not easy. It's not easy to understand. It's not easy to digest. It's not easy to explain to people. Um but you guys have done that and gotten us to where we are. So thank you guys very much for that.
▶ 0:45:34Um, as we chart a regulatory path for emer uh emerging technologies, we we have to remain focused on uh making sure that we're continuing to serve the the people and communities uh that run the risk of being left behind uh as we move forward. Uh I'm glad to see the inclusion of the study on expanding financial literacy amongst digital commodity holders. Um and I believe that it is a valuable step in understanding the challenges uh that Americans face in navigating this space.
▶ 0:46:02Um, but I also believe that, you know, we still had an opportunity to go a little bit further, but I understand why we uh necessarily couldn't, but uh I still believe that we we have to go further uh in terms of making sure that rural communities and underserved communities, including those in my district, um that they get more than just studies, that they get tangible um tangible outcomes, uh that they they they need access, they need tools, they need uh they need training. Um otherwise, you know, we run the risk of leaving these communities behind.
▶ 0:46:31There are still far too many areas across my district, across uh the state of Alabama, across uh we heard Congressman Taylor speak a lot about it in in the hearing, across the state of Ohio and other places across this country that still do not have access to the very uh core ingredient that is necessary uh to participate in this market and that's the internet. Um, and so I I do believe that we have an obligation to make sure that we're not leaving these communities behind as the digital economy uh accelerates.
▶ 0:47:02After all, these communities are already left behind in so many facets of economic life uh here in America. And so uh it's somewhat disappointing that we couldn't get in proposals for education and workforce development pilot programs and broadband access funding um to follow the results of the study. But uh we will get there. Uh we have to keep working. we have to keep going uh forward. Uh I do however want to thank my colleagues for supporting the inclusion of my provision to improve disclosures for blockchain related financial pro uh products.
▶ 0:47:31Uh yet another example of the type of uh bipartisanship and common sense uh attitude of this committee and working to get us where we are. Um look, the average American doesn't understand um you know, they they don't read beyond an eighth grade education. That's what that's what we know. And so when we start, you know, factoring in things like blockchain and cryptocurrency, uh the literacy rate for the average American plummets even further.
▶ 0:47:56And so we have to be mindful of that and doing everything that we can to make sure that we're providing the type of resources that are necessary uh to keep this market one that all Americans uh can participate in regardless of educational background or or where you live. Uh so I'll close by saying this. Uh the Clarity Act is a it's a significant milestone. a significant milestone. As Chairman Johnson, subcommittee chairman Johnson reminded us, uh this is really only a question of who is going to lead in this space in the future. It's going to be somewhere and we need it to be America.
▶ 0:48:26Uh and this gets us a a a big step closer uh to us being that. But what we're doing today must be part of a uh a longer journey, a journey that prioritizes transparency, accountability, and access for all communities, not just those that are currently at the table. So I want to thank my colleagues and with that I yield back. Thank the gentleman. Now recognize Miss McDonald River Rivet for five minutes. Thank you chair uh ranking member, subcommittee chair, subcommittee, ranking member.
▶ 0:48:55Um I I'm also thrilled as a freshman to be a part of something bipartisan. Fantasy land. Yeah, fantasy land. Um, since its creation, the crypto industry has rapidly grown to a market that directly affects about 1 in six US adults, with 70% of the population having invested or used cryptocurrency. Today, more than 55 million Americans are engaging in an environment that lacks a clear and consistent regulatory framework.
▶ 0:49:24I have heard from innovators, business owners, and workers about how the lack of clarity prevents innovation, causes confusion, and frankly hurts consumer protection. We can't allow this to continue. And I'm glad we're conducting today's markup. To ensure meaningful consumer protection in these spaces, we must create a regulatory framework, definitions, and jurisdiction, and equip assigned regulatory agencies with the appropriate authority to provide efficient and thorough oversight over digital asset markets.
▶ 0:49:53The digital assets and the crypto world agency provide an innovative space for industry to continue to grow and evolve. We have a duty to act to provide the necessary guardrails now that include many of the steps taken in this legislation. This bill helps strengthen our national security in digital asset markets by giving regulators the tools they need to track crossber transactions and stop digital assets from being used to evade sanctions or fund adversaries.
▶ 0:50:19At the same time, it modernizes financial oversight by updating laws and integrating blockchain specific innovation tools, creating a framework that supports innovation while keeping our markets safe and transparent. I'm supportive of today's legislation as a necessary step forward. We all know there's still some work to do. For instance, to fully empower regulatory agencies and allow them to provide successful oversight, we need to provide sufficient resources.
▶ 0:50:45That's why later today I will propose an amendment to provide the Commodity Futures Trading Commission with a continuous dedicated funding stream. We stand at a critical moment, a critical moment where structure is at an immediate need and this legislation is a meaningful step forward bringing clarity, accountability, and stability to the digital asset space. As the industry continues to evolve, so must our regulatory framework and oversight with clear rules, responsible guardrails, and the resources to enforce them. Thank you. And I yield back.
▶ 0:51:16Okay, cool. Y back. I thank thank the gentle lady. Now, please recognize the gentleman from Georgia, Congressman David Scott, for five minutes. Thank you, Mr. Chairman. And uh I have some very serious concerns about this crypto market structure bill.
▶ 0:51:40First of all, the bill we are presented with today will not bring order to the crypto industry, but it will open loopholes for bad actors to exploit.
▶ 0:51:54The way it divides uh regulatory authority between the commodities and futures trade commission and the Securities Exchange Commission invites crypto firms to pick a favored regulator as if they're buying the most lenient umpire in a baseball game.
▶ 0:52:16This is not The SEC enforces strict disclosure, investor protection, and anti-fraud requirements, but the standards our public markets have upheld for years. And also, the funding provisions in this bill are vague, inadequate, and quite frankly irresponsible.
▶ 0:52:41The bill allows crypto firms to bypass proper oversight and ignore investor protections. As I have outlined on multiple occasions here and in the finance committee, the CFTC, though essential, is not designed to oversee retailfacing investment products.
▶ 0:53:06Under this bill, firms that should be held to the CE SEC level scrutiny can simply claim their tokens or digital commodities and then fall under the F the CFTC's lighter touch regime. And this is a gift to the worst actors in this industry.
▶ 0:53:31What message does this send to the American people and to responsible actors? It says this. If you play by the rules, you lose. If you lobby for a loophole, you win. It would seem that this bill in fact fails to include even the most basic concessions that have been raised by Democrats the last time it came before the committee.
▶ 0:54:02This includes inadequate funding for the Commodities and Futures Trading Commission to perform such an expanded mission.
▶ 0:54:15For example, the bill states that the the CFTC shall charge and collect fees from persons who files with the commission, but fees may be collected and available only in the amounts provided in advance of an appropriate act.
▶ 0:54:37Now, given that the commission has not been reauthorized since 2005, are the authors and co-sponsors of this reckless bill expected to announce full CFTC funding anytime soon once that co coincides with the funding language included in this bill.
▶ 0:55:06This bill tells the CFT to do more with less. It hands the CFTC responsibility over digital commodities that represents million billions if not trillions of dollars in value, but not the funding necessary to regulate these products. This is a recipe for disaster.
▶ 0:55:32and I will be submitting several amendments to properly fund the CFTC and also to prevent the president and his family from enriching themselves as a result of this bill. Mr. Chairman, we should be working towards coherent, consistent, and credible regulation of district assets.
▶ 0:56:00This bill fails on all three merits. Thank you. Gentleman yields back. Now recognize the gentleman from Ohio, Mr. Taylor, for five minutes. Thank you, chairman and ranking member. I'd like to start by echoing Congressman Figures comments on the bipartisan work that's gone into this bill. It's been very gratifying to see and I appreciate everyone getting together on it. I'm very glad to be here today to advance this important and timely legislation.
▶ 0:56:29It's uh absolutely vital that this regulatory framework is put in place to maintain America's leadership and this incredibly promising technology. I point out though that the baseline requirement for participating in this new economy is is connection to the internet. Many people in my district do not even have that in any meaningful way and many other districts are in the same condition.
▶ 0:56:50If we don't put the same work and urgency into making sure every American has access to this technology, we are stacking further disadvantages on those who are already suffering most. So, as we move forward, as we should with our work today, we must make sure we don't do it at the expense of our citizens who are already struggling while not even providing them a chance to benefit from it. Thank you. I yield back. Gentleman yields back. Now recognize gentleman from Michigan, Mr. Tandar, for five minutes.
▶ 0:57:19Uh I want to thank uh Chairman Thompson and ranking member Craig uh for calling this mark of today and your leadership. Also want to thank uh uh Chairman Johnson and Ranking Member Davis for your leadership. Throughout uh my time in Congress, I have been proud to serve as a strong advocate for digital assets.
▶ 0:57:52From dramatically lowering fees on both domestic and international money to ensuring that every business can effectively compete at the global level.
▶ 0:58:09and the numerous beneficial cases of blockchain technology in regards to agriculture and family farms that we have heard at this committee.
▶ 0:58:25One thing is clear, blockchain technology is uh here to stay and it will significantly benefit the American We need to do everything we can to unlock the innovative potential and numerous positive use cases blockchain can provide to consumers.
▶ 0:58:57I have learned one lesson in my time in Congress is that the current status quo for digital assets isn't working. The absence of a clear, consistent, and regulatory framework for the digital asset market has led to inconsistent varied regulations at the state level
▶ 0:59:28and as a result has forced our most talented digital asset entrepreneurs to take their innovative products and the numerous economic benefits that they provide offshore.
▶ 0:59:46Being a sen serial entrepreneur myself, I understand how important it is to create an environment to foster growth, foster innovation, and ensure America's leadership in this critical technology.
▶ 1:00:13Each day we don't act, the damage done to the American economy grows. The digital asset market and the American people need the comprehensive bipartisan regulatory framework that the Clarity Act provides.
▶ 1:00:31While the Clarity Act, like any policy, isn't perfect, it represents a significant step in the right direction and will enable the United States to become a leader in the digital asset market for years to come. I urge my colleagues to support this necessary legislation. And Mr. Chair, I yield back. Thank the gentleman. He yields back.
▶ 1:00:58Now recognize gentle lady from Oregon, Congresswoman Selenus for five minutes. Thank you, Mr. Chair and Ranking Member Craig, and thank you to Mr. Johnson and Mr. Davis. I will be perfectly clear, this legislation is far from perfect, but it is a meaningful improvement over FIT 21 and it sets up a regulatory framework that puts us on a course to actually protect consumers when currently no such protections exist.
▶ 1:01:25In my home state of Oregon, we've seen what happens when crypto platforms operate without those meaningful guard rails. Just last month, Oregon's excuse me, Oregon's attorney general filed a lawsuit against Coinbase, one of the largest crypto exchanges in the country. The suit accuses Coinbase of misleading customers, failing to deliver basic protections, and profiting from practices that would never be acceptable in regulated financial markets. And unfortunately, Oregon's not alone.
▶ 1:01:52Across the country, people are being misled by the allure of crypto marketing that buries the risks while hyping all of the rewards. And these are not sophisticated hedge fund investors. These are everyday people, teachers, small business owners, young retail investors, all trying to navigate a market that's been the financial equivalent of the Wild West. The Clarity Act makes several key improvements to help change that.
▶ 1:02:16It strengthens financial protections for customers by requiring digital commodity exchanges to maintain enough capital to cover both their operational costs and all obligations to customers. That is an important shift, one that could prevent the next FTX style implosion from wiping out the funds of countless users. Another positive change is the bill's prohibition on treating tokenized real world commodities as digital commodities.
▶ 1:02:42This helps close a dangerous loophole and protects both commodity markets and crypto investors from being exploited by gimmicks. But let's be clear, none of these rules will matter if our regulators don't actually have the resources to enforce them. Both the CFTC and the SEC have told us that they're underresourced for the scale of the task ahead. They need more staff, more tech technical expertise, and the independence to do their jobs free from political interference. And I look forward to the amendments that we're about to see.
▶ 1:03:11that independence is under threat. We've already seen the Trump administration itself um insert itself further into SEC and CFTC rulemakings as well as gutting staff and pushing out regulators across the federal government. Meanwhile, President Trump is using cryptocurrency not to promote in innovation but to enrich himself, actively promoting and profiting from his own memecoin.
▶ 1:03:35It is a glaring conflict of interest and a textbook example of why the space needs strong independent oversight. So yes, the Clarity Act still has gaps. We need to keep pressing for stronger limits on political abuse and a full accounting of how these retail and institutional investors alike interact with these products. But I believe the foundation in this bill is clearly stronger and more investor focused than the current landscape. At its core, it is about fairness.
▶ 1:04:02It's about making sure that people who engage with these new financial products aren't left vulnerable to fraud, manipulation, or exploitation. That's why I believe we should move forward with the Clarity Act. It's our clearest path forward to create reasonable market structure that both protects investors and fosters innovation. Again, this legislation may not be perfect, and I will certainly vote for amendments to improve it here today, but I appreciate the chairman and ranking members efforts to put forward a first-step product that I'm able to support. Thank you and I yield back.
▶ 1:04:32Gently yields back. Any other Those are all the members I have in the queue. Mr. Duda from Hawaii is recognized for five minutes. Thank you, Mr. Chairman. Thank you, ranking member. I want to thank all of our colleagues for their bipartisan work on the Clarity Act, I think we can all agree that given the tremendous amount of promise and risks of this emerging technology and market, our country needs a clear framework that carves a path forward. But it's precisely because of those promises and risks that this bill needs to deliver more.
▶ 1:05:03I have serious concerns about gaps in this bill. By creating a largely flexible regulatory regime, we create continued ambiguity for market participants and make it far too difficult to predict which rights and protections exist for harmed consumers. This threatens to be another iteration of what we see time and again. A financial system to be manipulated by the powerful at the expense of everyone else. Let's be clear.
▶ 1:05:28Digital assets could transform access to financial tools, especially in communities that have long been left behind by our traditional banking system, including rural and neighbor island communities like mine in Hawaii. I think about the farmers and ranchers on Machai, where distance and infrastructure gaps limit access to basic financial services. There's been discussion to explore how blockchain might support value exchange outside of cash using technology to facilitate bartering and shared services. That's innovation grounded in real need.
▶ 1:05:57That's what this technology could do. Empower communities that have always had to make do with less. But instead, to be honest, that's not the version of crypto most people see. Instead, we've watched a wave of volatility, predatory schemes, and self-deing flood the industry. And those with the fewest protections are the ones most at risk. Working families, small investors, rural Americans, people just trying to get a piece of the American dream.
▶ 1:06:24and instead ending instead ending up with the short end of the digital stick. Right now, we're seeing something more nefarious. Political ye leaders using the promise of crypto not to lift people up, but to line their own pockets. And this causes great concern for fidelity in implementation of any bill passed. Let's ignore what's happening. We are watching a president openly embrace crypto as a political brand while simultaneously profiting off of it.
▶ 1:06:52Launching NFTts and memecoins, accepting crypto donations, and signaling to the industry that under his administration, regulation won't be about consumer protection. It'll be about cashing in. Last month, investors in one of President Trump's crypto projects invited to dine with him at one of his luxury golf clubs effectively using the anonymity of the internet and crypto technologies to buy access to the president. That happened.
▶ 1:07:18That is a profound abuse of public trust and is exactly why we need a regulatory framework that puts people first, not politics, not profits. So yes, let's provide regulatory clarity, but let's make sure we do it right. Let's build real real consumer protections and safeguards. Let's invest in financial literacy and digital access in underserved areas and rural America. And let's hold accountable anyone who uses this space to exploit rather than to empower.
▶ 1:07:47We have a chance to write the rules of the world for a new financial frontier. Let's not build a system that promises hope to Mulai and rural America but delivers to Mara Lago. Thank you, Mr. Chair, and I yield back. General Lelay yields back. Do any other members seek recognition to to speak? Mr. Jackson from Illinois is recognized for five minutes. Here we go.
▶ 1:08:18Thank you, Chairman. Thank you, Ranking Member Craig. Thank you, Chairman Thompson. It's been a honor to work with you over these many months now, years. Um, I stand in support of the Clarity Act. Uh, as we look to form this new emerging market, I think it's very important that we continue to keep open the doors of opportunity for those that have been historically locked out, those that have been marginalized, those that have not seen greater opportunities.
▶ 1:08:47And the truth is when you provide capital and confidence to any market you give the market certainty this further creates jobs, innovation and growth follows. The clarity act is not just a regulatory reform bill. It's a declaration I believe that this committee now will embody that we believe in the power of a well ststructured market and the potential for American ingenuity.
▶ 1:09:12And I want to make sure that we continue to house that and in particular we house that in the city of Chicago. Let's be clear about the size and the opportunity before us. The sectors addressed by this bill, blockchain technologies, AI systems, next generation financial products and digital marketplaces represent a market that is already in the trillions of dollars over 3.2 trillion globally. It is growing exponentially in the United States.
▶ 1:09:38If we provide clear, rational, and enforceable guidance can lead that growth. But today, we're not leading. We are also lagging. I hope this turns us around quickly. Why? Because of regulatory ambiguity because companies can't tell if they're building within the law or stumbling unknowingly outside of it. That uncertainly drives capital offshore. It's it's uh forces entrepreneurs to launch elsewhere.
▶ 1:10:05It reduces tax revenue, job creation, and long-term investments here at home. The Clarity Act addresses that, and I thank you for your work. It brings light to where there has been fog. Now, let me speak not only one that's been a legislator, but also someone that has spent decades looking at capital flows. Capital doesn't hate risk. In fact, it thrives on measured risk. But capital abhors uncertainty. where we remove that uncertainty, capital comes re rushing in.
▶ 1:10:34With the Clarity Act, we are sending a clear signal to global markets that the United States welcomes innovation, but we do so responsibly with strong disclosures, investor protections, and a legal framework that encourages entrepreneurship instead of penalizing it. By 2030, it is projected that 20% of global GDP will be tied to digital assets, decentralized systems, and tokenized financial products. These aren't fringe markets. They are the future of global commerce.
▶ 1:11:04And yet, our innovators are still waiting for permission rather than forging ahead with conviction. What this act provides is not deregulations. It's smart regulation. It's the kind of legislation clarity that allowed biotechnology to flourish in the 1990s. is what helped the internet scale responsibly in the 2000. It's what can ensure that AI, web 3, and financial innovations aren't just led by American firms. They're anchored in American values.
▶ 1:11:32Finally, I want to say that the Clarity Act is not a partisan pra it's not only part not just partisan, it's pragmatic, it's progrowth, it's proconsumer, and most of all, it's pro our future. When we pass this act, we will not only unlock trillions of investment and future and job creation, we will ensure that the benefits of this new economy flow to every corner of this country, not just Silicon Valley and Wall Street.
▶ 1:11:57I would also encourage my colleagues to make sure that we continue to to expand access to capital, that we hold the American values of diversity, equity, and inclusion, that we continue to bring more people into the marketplace and bring down barriers. With this, I yield back. Thank you, Chairman Thompson. Thank you, Ranking Member Craig. I yield. Thank the gentleman for yielding back. Now recognize the gentle lady from Maryland, Representative Mlan Delaney for five minutes. Uh thank you, Mr.
▶ 1:12:27Chair, and thank you to our ranking member for bringing us together today. Uh so, as we've all been talking about, we're at a pivotal moment. Digital assets and blockchain technology are advancing quickly. Artificial intelligence and other emerging technologies are also evolving. Together, these innovations are reshaping business, privacy, markets, and also our public trust.
▶ 1:12:50It's up to us as members of Congress along with our financial services counterparts to respond with nimble, smart, and forward-looking policy. This means listening, learning, and working together even when cooperation is rare on Capitol Hill nowadays. The bipartisan clarity act is a prime example of smart bipartisanship which been has been a hallmark for decades of the agricultural committee. I strongly support this common sense work and our country needs to see more of this.
▶ 1:13:21Digital assets are already touching people's lives every day. They're helping home buyers make faster payments. They're allowing small businesses to accept digital transactions. And they're enabling farmers to track food safety and supply chains. And as was pointed out by my colleague, it is imperative that we continue to work on high-spe speed, affordable internet for all Americans. To utilize this currency, we must all prioritize closing the digital design, closing the digital divide.
▶ 1:13:50But these tools can also come at real risk. We've seen scams and fraud wipe out savings, and we've seen personal data compromised, and our law enforcement struggle to keep up with bad actors. If we get this regulatory framework wrong, our constituents, retirees, small investors, and working families will pay the price.
▶ 1:14:11If we get it right, however, we can unlock real innovation and build a safer, more inclusive financial So, the bulk of my legal career was spent um in online children's safety and in consumer protection. And I've seen what happens when regulation comes late or doesn't have the right bumpers and safeguards. Innovation, trustworthiness, and accountability must go hand in hand.
▶ 1:14:36And that requires real cooperation across the aisle, across sectors, and across generations of technology. Well, I'm very, very encouraged by the bipartisan uh conversations around the Clarity Act, and I truly appreciate the efforts of Republicans and Democrats to come together. I do believe there's still a little more work to be done to get it across the finish line.
▶ 1:15:01This bill is a big step towards providing clearer rules and stronger tools for regulators and for those in the marketplace. But there are still a few policy issues to be addressed. If we're serious about oversight and creating trustworthiness, we must significantly increase some of our capacity to look at these issues. And expanding regulation without adequate support isn't just impractical, it's Today I am running several amendments to make this bill better.
▶ 1:15:30My amendments provide emergency funding authority for the CFTC, allow the CFTC to collect fees, something that was not in the earlier bill, and remove a special exemption allowing crypto companies to bypass full securities regulation. I am grateful to the chair and ranking members collaboration throughout the night and thrilled to see that my amendment in is in the manager's amendment.
▶ 1:15:53My amendment would have required the CFTC to establish rules establishing requirements for identifying, mitigating, and resolving conflicts of interest. Thank you so much to the chair and ranking member and of course your tireless staff on both sides of the aisle for giving us the opportunity to improve the bill. I look forward to continuing the work with my colleagues today so we can build something that truly works for the American people. I yield back. Gentle yields back. Do any other members seek recognition to speak? Mr.
▶ 1:16:23Mesmer is recognized. Thank you, Mr. Chairman. M Mr. Chairman, uh after months of hearings, briefings, and negotiations, I'm thrilled this committee is finally coming together to consider a substantive solution to the current failure of the digital assets regulation. During the drafting process of the Clarity Act, three sets of witnesses were brought before the committee to share insight as blockchain developers, market regulators, and legal experts. Divi despite their various career paths and perspectives, three common threads tied all their testimonies together.
▶ 1:16:53First, that uncertainty resulting from a lack of regul statutory regulations has produced a period of muddled regulation under innovation and uprooting of industry from American soil altogether. Second, that failure to distinguish jurisdiction between the SEC and CFTC has created duplicative requirements, loopholes for bad actors, and a complete regulatory gap surrounding the exch exchange of dig digital commodities on the spot market.
▶ 1:17:20And third, that the lack of federal regulation subjected to uh customer subjected the customer to extreme risk. And finally, by putting forth a definition for digital asset commodities that clearly builds them under the under the home of the CFTC's regulatory umbrella, the Clarity Act resolves this jurisdictional tugofwar and preserves the CFTC's principle principles-based regulatory method to allow regulation to adapt to the needs of a fluid marketplace.
▶ 1:17:47This bill trades regulatory uncertainty for stability, rampant fraud for for consumer protection, and industry-wide oppression for innovation. I lend my support to this bill and I look forward to seeing to seeing it on the House floor. And thank you, Mr. Chairman. I yield back. Gentlemen yields back. Did any other members seek recognition to speak at this time? Uh, Miss Hayes from Connecticut is recognized for five minutes. Thank you, Mr. Chair.
▶ 1:18:17I move to strike the last Thank you. As of June 6, 2025, the total market capitalization of all cryptocurrencies was $3.6 trillion. It is time for Congress to act to develop legislation to finally regulate Unfortunately, this bill falls short of the oversight and resources needed to appropriately regulate the industry.
▶ 1:18:43Specifically, I'm concerned that the Commodities Future Trading Commission may not have adequate resources to properly carry out its responsibilities under this bill. The CFTC had about 708 full-time equivalent employees at the beginning of this year. They now have with further reductions in force expected. The Trump administration requested a slight increase for the CFTC, but only enough funding for 650 full-time employees.
▶ 1:19:13Nothing for the expanded responsibility this legislation mandates. Additionally, the secretary has not confirmed a permanent chairman for I'm sorry, the Senate has not confirmed a permanent chairman for the agency and the commission is presently missing three members. The current acting chairman, Carolene Fan, has signaled that she will step down once the Senate confirms her replacement. Commissioner Kristen Johnston has also indicated that she will leave, quote, later this year.
▶ 1:19:41I'm concerned that this understaffing will severely delay rulemaking on digital assets or prevent it entirely. If this remains the case, any clarity that this bill provides to digital asset markets will be in name only as regulators will remain paralyzed by a lack of resources. Additionally, I'm concerned that this bill does not address the blatant corruption we are seeing coming out of the White House as it pertains to cryptocurrencies and digital assets.
▶ 1:20:08This committee is right to prohibit federal employees and members of Congress from using privileged information to enrich themselves with digital commodities, but this bill excludes the president, vice president, and their families from those rules. President Trump has earned $148 million by selling his memecoin in exchange for direct access to private dinners with him at one of his golf clubs, essentially selling access to the commander-in-chief.
▶ 1:20:35Congress should focus on strengthening confidence in our digital asset markets, not creating more loopholes that allow individuals to profit from them. For these reasons, I cannot support this bill in its present form, but look forward to any changes that can be made to uh solicit response not only from our committee but from the great the broader Congress. And with that, I yield back. Gentle lady yields back. Any other members seek recognition to speak at this time?
▶ 1:21:04Seeing um seeing none uh pursuant to the committee rule 3II and House rule 11 clause two, the chair may post postpone postpone further proceedings today on the question of approving any measure or matter or adopting an amendment on which a recorded vote is ordered.
▶ 1:21:28Um and hearing no further discussion, the committee will now consider the whole amendment in the nature of a substitute. Does any member have an amendment to the to the bill and actually I do have um Miss McDonald Rivet u has a amendment at the desk, amendment number nine. The clerk u will report and distribute the amendment. Amendment number nine offered by Mrs. McDonald Rivet of Michigan.
▶ 1:22:06You're pass. I got you down here.
▶ 1:22:27I'll get you at 8:00. for breakfast.
▶ 1:23:19So without objection, the amendment will be considered as read. I now recognize the distinguished gentle lady to sponsor the amendment for up to five minutes for an explanation of her amendment. Thank you, Mr. Chair. I offer this amendment to provide adequate funding to the Commodity Futures Trading Commission to allow it to carry out the oversight responsibilities it is assigned in today's legislation.
▶ 1:23:42As I mentioned in my opening comment, creating a dedicated and continuous funding stream for the CFTC is vital for its future success, especially as our committee proposes to expand its scope of work. For the agency to fulfill its responsibilities under this new regulatory framework, former CFTC chair, a former CFT chair, has emphasized the need for an additional $120 million in funding.
▶ 1:24:07Instead, the House Agricultural Appropriations Subcommittee has proposed cutting 31 million to the CFTC's current budget. I propose that we increase the funding to the CFTC by having exchanges enrolled pay a nominal and fair annual fee to ensure these agencies can deliver strong oversight and protect consumers in an evolving market. We must ensure it has the fundamental resources and long-term stability to succeed. Thank you. And I yield back. Gentlemen yields back.
▶ 1:24:35Any other members seek recognition to speak on the gentle lady's amendment? The ranking member is recognized. I'd simply uh like to thank the gentle lady for her amendment and add my support uh to the effort. Thank you. Gentle yields back. Any other members seek recognition? If not, I'll take the opportunity.
▶ 1:25:00I I appreciate the gentle's interest in ensuring that CFTC has the resources it needs to be able to fulfill its mission and we share that goal. However, I must oppose this amendment. Our partnership with the appropriations committee is critical to the careful oversight of the work of the commission. And while the bill does provide temporary increase in funding for the commission through fees to process the implementation of this legislation, it is intended to be temporary.
▶ 1:25:28Ultimately, the good governance brought through the appropriations process is essential to having an effective regulator. But I do believe that as we increase the CFTC's workloads, we must increase its resources. I look forward to working with my colleague to ensure that the agency is well resourced through the annual appropriations process.
▶ 1:25:48And I urge my colleagues to vote no on this Does any other member wish to be Hearing no further conversation or questions on the amendment uh uh which is amendment number nine offered by Representative McDonald Rivet. Um all those in favor of the amendment signify by saying I.
▶ 1:26:19Those opposed by saying no. No. Independent the chair of the nose have it and the amendment is not agreed to. Okay. Um now recognize uh Congresswoman Mlan Delaney as amendment at the desk. Amendment number five. The clerk will report the amendment. Amendment number five offered by Mrs.
▶ 1:26:47Mlan Delaney of Uh the and distribute the amendment,
▶ 1:27:46thank you. The days are full. If there's any time in the next two days, if not, you can do whatever. But in the future, something opens up, let me know. Not necessarily in the morning. I can do without pancakes. Okay. Very good.
▶ 1:28:14amendment has been uh and um now recognized distinguished gentle lady from Maryland the sponsor the amendment for up to five minutes for an explanation of her amendment. Uh thank you again Mr. Chairman. Uh sustainable regulation requires stable funding and as we consider the clarity act we must recognize that regulation without resources is regulation in name only.
▶ 1:28:41As already noted by my colleague McDonald Rivet, the need for stable funding is key. As rewritten, the Clarity Act relies on short-term uncertain fee structure, putting the CFTC at a disadvantage. This is particularly troubling as the CFTC will be tasked with enforcing a new regulatory regime with already strained financial resources. I am grateful for the bipartisan conversations around the CFTC funding, including the development of a fee structure.
▶ 1:29:08This is an improvement from the funding structure in FIT 21, but we still need to look at long-term reliable funding strategies that match the scale of what we're asking this agency to do. My amendment would provide a critical backs stop. It would allow the CFTC to drop to 100 million per year from the Federal Reserve Surplus Fund.
▶ 1:29:28The option would be available if the CFTC's funding falls below what is actually needed to protect investors, enforce anti-moneyaundering laws, or ensure financial stability. The CFTC is being asked to oversee a fast-moving, high-risk digital asset market, but it's severely underfunded. We know this to be true. Without adequate resources, the CFTC cannot hire the right technical experts.
▶ 1:29:55It cannot coordinate with Treasury and law enforcement and it cannot properly enforce anti-money laundering rules. If we expect the CFTC to lead and for there to be trust in this currency, we must give it the budget and the tools to succeed. Anything less leaves gaps that bad actors can exploit and leaves consumers and markets exposed.
▶ 1:30:20I recognize that my amendment falls in a gray area outside the direct jurisdiction of the agricultural committee with the inclusion of federal reserve surplus funding as the backs stop. I'm treading a bit on the financial services committee territory, but somewhere it lies between the two of us. However, I did not want to use this opportunity to highlight a creative approach.
▶ 1:30:44I did want to use this opportunity to highlight a creative approach to long-term common sense, common ground funding strategies for the CFTC. I sincerely hope that it can be properly addressed before it is brought to the House floor for a vote. It's about building trust. Thank you for your attention. However, given the potential geriness of the issue and further discussions which might be taking place, I will withdraw my amendment. Thank you. And I yield back.
▶ 1:31:13General lady withdraws amendment number five. Uh the gentle lady from Maryland has a an amendment at the desk number six that the uh clerk will report and distribute the amendment. Amendment number six offered by Mrs. Mlan Delaney of Maryland.
▶ 1:32:13Thank you. The uh clerk having distributed the amendment to all members.
▶ 1:32:38Uh without objection, amendment number uh six offered by the gentle lady from Maryland, Miss Mlan Delaney will be considered as read. I now recognize the distinguished general lady to sponsor the amendment for up to five minutes for an explanation of her amendment. Thank you, Mr. Chairman. Again, section 410 of this legislation outlines the resources that CFTC will be needed to implement this new regulatory framework.
▶ 1:33:07Right now, the fee structure provided in this bill to support the CFTC operations is unpredictable and temporary. This paired with the limited resources that the CFTC already has, which we've just discussed, is a risk alongside implementation of a new regulatory framework. As I've stressed today, with the anticipated increase in registrance and market activity, the CFTC's responsibilities will grow significantly. They will need the right tools to support their mission effectively.
▶ 1:33:35My amendment would make a modest but extremely consequential adjustment to the Clarity Act. Specifically, my amendment would ensure the CFTC can collect fees and registration fees from the new entrance required to register with the CFTC and the SEC. These fees won't be just a one-time collection. The CFTC will collect them initially and annually for four years. This approach gives the agency the steady funding needed as it builds to uh solidify a regulatory framework.
▶ 1:34:03Including this funding mechanism will allow the CFTC to hire skilled staff and conduct thorough market oversight, uh, enforce AML laws and promote financial stability. This amendment isn't just a win for the commission. It's a win for the entities it oversees to. Ultimately, this benefits all market participants who rely on a fair, transparent, and well reggulated marketplace.
▶ 1:34:29By providing a sustainable path to effective regulation, we strengthen and again use the word trust and confidence in our digital asset system. I urge my colleagues to support this amendment, a technical but important fix and assure that the CFTC has the resources it needs to succeed. Thank you and I yield back. Gentle yields back. Any other members? Mr. Davis seeks recognition. Um, thank you so much. Five minutes. Thank you so much, Mr.
▶ 1:34:58chair and I would like to thank my colleague for bringing this forward. We continue to hear a theme here about the CFTC and making sure there's adequate resources here. Um I'd like to thank my colleague for bringing this up. Um the CFTC needs funding in order to carry out the requirements of the Clarity Act. Um having the registrate fee in once the CFTC um completes its rules.
▶ 1:35:22uh that leaves the CFTC short of funding in order to continue to carry out the regulatory um parts of the industry. So we do support this amendment. Thank you. I yield back. Gentlemen yields back. Any other members seek recognition to speak on the general lady's amendment number six? If not, I'll take the opportunity here. I thank the gentle lady from Maryland for offering this amendment.
▶ 1:35:51This is an important amendment to ensure our intent is captured in the legislation. We want to ensure that CFTC has the resources it needs to carry out this act and continue its mission of promoting the integrity, resilience, and vibrancy of the US derivatives market through sound regulation. This amendment is critical to ensure that the CFTC can charge and collect annual fees for firms registered with it.
▶ 1:36:17Uh we worked in a bipartisan fashion last Congress to ensure CFTC was adequately resourced and I'm proud to do so again this Congress and will support this amendment hearing no further conversation. The question is on amendment number six offered by the gentle lady from Maryland, Miss Mlan Delaney. Uh all those in favor of the amendment signify by saying I.
▶ 1:36:46I those opposed by saying In the opinion of the chair, the eyes have it and the amendment is agreed to. Uh, one last amendment at the desk. Amendment number seven. Uh, the clerk will report the amendment and distribute it.
▶ 1:37:14Amendment number seven offered by Mrs. Mlan Delaney of Maryland.
▶ 1:38:34Without objection, the amendment will be considered as read. And now recognize the distinguished gentle lady from Maryland to sponsor the amendment for up to five minutes for an explanation of their amendment. Thank you again, Mr. Chairman. When I read through the text of the Clarity Act, one particular provision caught my attention. Specifically, the exemption that would allow SEC registered firms to engage in digital commodity activities without registering with the F CFTC.
▶ 1:39:04This may seem like a way to reduce red tape and duplicative regulation, a goal many of us share, particularly me, but it also raises some real concerns. Without clear coordination between the SEC and the CFTC, our markets could face large oversight gaps. This could lead firms to take advantage of weaker rules, hurt investor trust, and undermine consistent standards across our financial markets.
▶ 1:39:33Many digital asset firms operate both in securities and the commodities markets and are already registered with both the SEC and the CFTC. Letting SK firms skip one regulator creates an uneven playing field and risks investor protection. The CFTC has long regulated commodity markets including digital assets. So exempting firms removes a key layer of oversight.
▶ 1:40:00In traditional finance, firms dealing in both uh register both with both agencies. This exemption would create a two-tiered system, treating digital firms more preferably than others, which isn't fair or smart. Our traditional finance companies should not be disadvantaged, and we should create a fair and level playing field for all market entrance.
▶ 1:40:27Striking section 411 strengthens the underlying bill. It was restore accountability, instal treatment across the market, and empower the CFTC to hold its role without expanding bureaucracy. This is a really targeted fix that supports innovation while preserving the integrity of our markets.
▶ 1:40:50My amendment is a solution rooted in fairness and ensuring robust competition, something we should all want. With that, I thank you and I yield. I urge support for this amendment and yield back. Gentle lady yields back. The other members seek recognition and speak on amendment. Recognize the ranking member for five minutes. Thank you, Mr. Chairman. I just wanted to make sure everyone knows that I support the gentle lady's amendment.
▶ 1:41:19The current regulatory structure for most financial products require registration with a specific regulator to engage in transactions under such regulators oversight. If an entity, for example, a bank, wants to deal in securities or futures, they have to register for those purposes under the SEC and CFTC respectively, even though they are already supervised by a bank regulator.
▶ 1:41:44Entities either have to wear multiple hats and report to multiple regulators or have separate affiliates, so registered to perform specific functions. Section uh 411411 in this bill adds a new section to the Commodity Exchange Act, section 5K, which would undo the long-standing practice when it comes to digital commodities.
▶ 1:42:06Section 5K would allow SEC registered entities to be engaged in activities related to digital commodities without having to register with the CFTC so long as those activities fall below certain thresholds. I'm concerned that allowing separate regulators to regulate the same activities, but under different regulatory standards for different market participants would lead to at best consumer confusion or at worst regulatory arbitrage.
▶ 1:42:36The last thing we want is the possibility of a regulatory race to the bottom with market participants trying to play one agency off against the other for lower standards of care. While there are other SEC entities which enjoy similar exemptions from CFTC registration, much of those exemptions were achieved by the CFTC using its own uh exemptive authority after public notice and comment to grant those exemptions.
▶ 1:43:05I would note that the bill already provides the CFTC with such uh exemptive authority and the agency could after notice and comment issue rules providing for an exemption modeled after the provisions in 5K. I think it is important more important for the SEC and CFTC to first get their rules established for this marketplace before we start granting exemptions. The amendment strikes section 411 and corresponding citations in the act to the new 5K language.
▶ 1:43:35I believe keeping a current dual regulatory framework for digital commodities is an appropriate starting point for this new industry. It is familiar and related to financial products are related. Of course, the CFTC can and should use its exemptive authority to provide necessary exemptions to avoid duplicative regulation and conflicting rules. But until we know what those rules are, providing an exemption right off the bat in statute would be putting the cart before the horse.
▶ 1:44:04I urge my colleagues to support the amendment and Mr. Chairman, I yield back. Gentle lady yields back and I recognize gentleman from North Carolina seek recognition for five minutes. Mr. Davis, Mr. Chair, I do appreciate it. Um, I stand on the ranking members comments. I line with I yield back. Gentleman yields back. Any other members seek recognition to to speak on the gentle lady from Maryland's amendment number seven?
▶ 1:44:33If not, I'll take the opportunity to be able to to do that. I thank the gentle lady for amendment. As you all know, we've collaborated very closely with financial services for several years on this. Um, I'm very proud of the the uh I guess by committee uh work that we've done. that's kind of not real typical in Washington DC and and um very appreciative of of all of our members engaging with that. Um and we've done that for years on digital asset market structure.
▶ 1:45:04Uh this particular section uh is an important priority for our friends at financial at the financial services committee. That's what was their ask and I value what they have contributed to this effort. So, um I uh have to oppose this amendment. any other members seek recognition uh to speak.
▶ 1:45:28If not hearing no further conversation, the question is on the amendment. All those in favor of the amendment signify by saying I. I. Those opposed by saying no. No. In the opinion of the chair, the nos have it and the amendment is not agreed to. Mr. Chairman, I'd like to call for a recorded vote.
▶ 1:45:50Recorded vote is Um, pursuant to committee rule 3 I2, further proceedings on the amendment shall be postponed. Uh, Mr. David Scott has an amendment at the desk. Um, amendment number one. Um, the clerk will report the amendment and distribute the amendment. Amendment number one offered by Mr.
▶ 1:46:17David Scott of The
▶ 1:47:43amendment having been distributed without objection, the amendment will be considered as read. And now recognize a distinguished gentleman from Georgia, the sponsored amendment for five minutes for an explanation of his amendment number one. Thank you, Mr. Chairman. Chairman Thompson, we are sitting here today marking up a bill that expands regulatory authority of the Commodities Futures Trading Commission.
▶ 1:48:12an already overstretched agency with responsibilities for an entire new asset class without providing the financial resources necessary for them to do the job. Let us not forget that Congress has failed to formally reauthorize the CFTC since 2008. Yes, that's correct.
▶ 1:48:42Two decades without a proper modern reauthorization for the CFTC. And now with this bill, we are piling onto that neglected framework a sprawling new mandate to regulate digital assets, which now is the most complex sector of our nation's economy.
▶ 1:49:11The funding provisions in this bill are vague, inadequate, and frankly This bill essentially tells the CTF, "Do more with less." It hands over the of the digital commodities that represent billions, if not trillions of dollars in value.
▶ 1:49:37Yet, it does not provide necessary funding to carry out these tasks. My amendment will fully reauthorize the CFTC to make sure that the agency is adequately funded to hire regulators, technologists, auditors, enforcement personnel, and the cyber security experts that they need
▶ 1:50:07to get the job done. My colleagues will remember that I offered the exact amendment two years ago when our committee considered the FIT 21 market structure bill. Mr. Chairman, last Congress, you and the authors of this bill committed to me to working to get the CFTC reauthorization over the finish line.
▶ 1:50:37please do this. And yet two years here later, no substantive efforts have been made to do so. If FIT 21 was not the proper vehicle to the CFTC and the partisan farm bill is not either, what is?
▶ 1:51:01Does the CFT have to wait another five years or the next farm bill for Congress to finally do its job? Weak oversight in an industry that is already rife with bad actors will not just impact markets. It will impact the American people.
▶ 1:51:26Without a fully funded everyday investors, consumers, working Americans will remain vulnerable to the fraud, to the manipulation and the abuse that will result as a product of this reckless bill.
▶ 1:51:49We've seen time and time again what happens when Washington underfunds regulators and looks the other way. My amendment will ensure we don't repeat our mistakes. Mr. Chairman, I plead with you. We owe the American people better.
▶ 1:52:12And I strongly urge all my colleagues, both the Republicans and Democrats, to support this amendment, let's give the the kind of funding that they deserve to make sure this and delicate product is done for the American people.
▶ 1:52:42And I thank you for the time and I hope this committee will please support this vital important amendment and the CFTC thanks you. That gentleman's time is expired. Any other members seek recognition to speak on this amendment? Mr. Davis from North Carolina is recognized. Five minutes. Mr.
▶ 1:53:07Chair, I would simply come back to this theme we continue to hear today and that is we want to move forward. I want to be clear. I think it's important to move forward, but at the same time, there has to be adequate support and we really have to continue to think through um it's been way too long um since we have reauthorized the CFTC and now with the Clarity Act moving forward, we're working to get this to the president by August.
▶ 1:53:35I really think we have to um what the gentleman Mr. Scott has asked for and you know I'll simply say I mean I may have different thoughts about where we are today you know matter of fact I would say you know when I think broadly speaking um we need to move forward um and we agree on this one point here that we definitely need
▶ 1:54:05to reauthorize the the the CFTC regardless. So, um, I support this amendment and ask for everyone to do the same. The gentleman yields back. The ranking members recognized for 5 minutes. Thank you, Mr. Chairman. Uh, I rise today to support the gentleman's uh, amendment. This legislation before us would give the CFTC greater authority to regulate the marketplace. But, of course, we all know that the CFTC has not yet been reauthorized.
▶ 1:54:35We had a hearing um just you know a few weeks ago about how great the CFTC is at what they do, how their principalbased regulatory regime is just what's needed for this innovative and new industry. But of course the CFTC is not reauthorized.
▶ 1:54:51We're about to vote to give the agency new fee collecting authority to assist in helping fund the agency through this new regulatory frontier, but of course the CFTC is not For the past 20 years, the agency has continued to operate without an authorization given the responsibilities we could give this agency in this bill. That needs to be rectified. Of course, this amendment would authorize the CFTC for the next five years. U Mr.
▶ 1:55:20Chairman, again, I strongly support this amendment and I yield back. Gentle yields back. Any other members seek recognition to speak on uh Mr. Scott's uh amendment number one? If not, I'll take that opportunity. I thank the former chairman of the committee for offering this amendment on reauthorizing CFTC. I'll also remind him that he we we didn't reauthorize on his two year of his watch when he was chairman. We didn't get it done.
▶ 1:55:50Reauthorizing the CFTC is extremely important and remains a priority of mine, but this bill is not the place to do that. Reauthorization is about refinement. It's about being visionary. It's about looking to today and tomorrow of of any program or any agency that we reauthorize. This would be a shortsighted move to do that. Now, we we have to authorize the CFTC through a process where we can address a number of outstanding issues.
▶ 1:56:19Now, just a few there that would be left behind by including this reauthorization into this bill. that would be ensuring funding for the whistleblower office and and customer protection fund and and so much more when you look at refinements that are necessary especially given what we're looking at today uh with u uh digital commodities and so uh we owe the CFTC and all those served by it a full package and a proper piece of legislation to
▶ 1:56:49reauthorize the agency. I on the question of reauthorization I think we're unified on that. It's just there's a right way to do it and and a not so right way to do it. So, uh based on that, I have to oppose this amendment. Um the uh hearing no further conversation, the question is on the amendment. All those in favor of Mr. Scott's amendment number one uh signify by saying I. I. All those opposed by saying no.
▶ 1:57:19No. In the opinion of the chair, the nose have it and the amendment is not agreed to and a recorded vote has been requested pursuant to committee rule three I2. Further proceedings on the amendment shall be postponed. Uh Mr. David Scott from Georgia has amendment at the desk amendment number two that the clerk will report and distribute. Amendment number two offered by Mr. David Scott of Georgia.
▶ 1:58:25Thank you. The clerk having distributed the amendment I uh the amendment will be considered as read and I now recognize a distinguished gentleman the
▶ 1:58:55sponsor of the amendment for up to five minutes for an explanation of his amendment. Thank you Chairman Thompson. The bill before us does nothing to address President Trump's conflicts of interest and his personal involvement in the crypto industry. This ultimately leaves an open avenue for quidd proquo for bribery and for corruption.
▶ 1:59:25My amendment would prohibit President Trump from benefiting financially as a result of issuing, promoting, or trading assets. And it would also require the president's family to place their digital assets in a blind trust.
▶ 1:59:49I share deep concern regarding President Trump's use of cryptocurrencies to enrich himself and his family while he's in office. For over six months, Democrats have been raising this issue, which my Republican friends refuse to address.
▶ 2:00:12And right before being sworn in as the most powerful person in the world, the president launched his own digital coin, followed by closely by other members of his own family.
▶ 2:00:29And within 3 days of release, President Trump's coin reached a value of $70 billion, making it the 15th largest coin in the world.
▶ 2:00:44Now, not only has the president profited directly off his official position, but some of the wealthiest crypto investors have been able to buy access to the president.
▶ 2:01:02Given the bill's exemption from registration with the SEC under section President Trump could not only pedal his mimic coins and stable coins, but he could also solicit investments from Americans to line his own pockets.
▶ 2:01:27My me prevents the president and those closest to him from issuing endless cryptoc currencies. It will strengthen ethical governance. It will prevent conflicts of interest and protect markets from manipulations.
▶ 2:01:49Blind trust prevent insider trading like scenarios where presidential family members can benefit from nonpublic policy deliberations. Now, this amendment closely aligns with precedents in financial ethics that already exists for stocks, bonds, and traditional business holdings.
▶ 2:02:17It recognizes that digital assets are financial assets, not fundamentally different from other forms of wealth when it comes to ethical conflicts. Mr.
▶ 2:02:34Chairman, allowing this basic corruption to take place undermines every conceivable US presidential ethical standards. So I urge strong support for this amendment and yield back the balance of my time.
▶ 2:02:59Any other members seek recognition to speak on this amendment? Mr. Davis recognized for five minutes. Thank you so much, Mr. Chair. I'm going to start by saying um Mr. Scott, we may have different thoughts on the overall bill, but we're landing at the same place on your amendments. And what I would say, sunshine is always good. Sunshine, transparency.
▶ 2:03:23And what I would like to emphasize on this amendment and and this is my perspective, my take and I want to be clear. It doesn't say President Trump here. It just says the president of the United States. Um the point that I'm making here is I believe the amendment would apply to whoever at any time in the history of this country is elected to the presidency. And and I think that's an important point to make. Um, I would go even a step further and say we're doing everything under the sun to keep this bill bipartisan.
▶ 2:03:54Um, this is probably one of the biggest areas of contention. Um, by all means. Um, if we really want to continue to make this bipartisan, then we could apply this to anyone who is elected as as the president of the United States. Uh, Mr. Chair, this is about transparency. It's about accountability. Um, and I urge support of this amendment. Even though it may be tough, I do urge support of this amendment.
▶ 2:04:24Well, I I appreciate each gentleman's comments and um and quite frankly the um the parliamentary language that you utilized uh the um where you made it in general, not to a specific person uh which is on parliamentary language. when you make it specific to a specifically to a specific president or vice president.
▶ 2:04:46So, u not to take any previous light uh words down, but I appreciate your being consistent with with that provision of what we do. Any other members seek recognition to to speak on the I hear a voice, but okay. Go with Miss Adams. You're recognized for five minutes. Thank you, Mr. Chairman. Just briefly, I don't need five minutes. Uh I I think the uh the gentleman from Georgia has a has a great amendment.
▶ 2:05:14I certainly uh support I support it and I support it for the reasons uh that he has outlined. And I think when we talk about transparency, I I certainly agree with the gentleman from North Carolina. We've got to be transparent. Transparency right now is that we know who the president is. Uh so even though we're talking about the future, but we're also talking about the present. the president is that our our president is is is is Donald Trump.
▶ 2:05:41So, uh and all of the things that um uh that have been said regarding the possibilities of what could happen and what what what happening right now I I think should concern us. But uh so I I'm certainly with you on this amendment. Uh thank you for offering it and I yield back, Mr. Chairman. Gentle yields back. Any other members seek recognition? speaker amendment. Mr. Seline is recognized for five minutes. Uh, thank you, Mr. Chair. I'll be brief.
▶ 2:06:10Um, I do support this amendment and I have a lot of folks in my district who who voted for President Trump. I have a lot of vote folks in my district who voted for the previous president as well. And I think the reason this amendment is so important is because the American people really have lost trust in their government and they want to know that we are going to protect them from any official from being from taking advantage of unwitting investors and that's exactly
▶ 2:06:40what this does. So whatever president may come along they would just not be able to own issue promote or control any digital assets including memecoins. So whether it's this president today or a future president, we need to start restoring trust and faith in our elected officials and I think this amendment does that. I yield back. Gentle lady yields back. Others any other members seek recognition to speak on this amendment. If not, I will do that.
▶ 2:07:09Uh want to thank the gentleman for his amendment, but I'm afraid I have to oppose it. Um, sunshine is important, but sunshine comes from different places on Capitol Hill and and from a a jurisdictional perspective, it kind of dictates where the sunshine comes from. This is not the venue to discuss presidential ethics. Uh, at the end of the day, discussions around appropriate ethical limitations imposed on the president are not the subject of this committee. They're subject of the oversight committee.
▶ 2:07:38Uh the focus of this committee and this legislation is not to tell the president what they can and cannot do. Purpose of this legislation is to give the American people a comprehensive regulatory framework so they can participate in the digital asset ecosystem with confidence and certainty and and let innovation uh flourish. And for that reason I oppose this amendment.
▶ 2:08:03Um Where are we hearing? No further conversation. The question is on the amendment. All those in favor of the amendment signify by saying I. I. All those opposed by saying no. No. In the opinion of the chair, the nos have it and the amendment is not agreed to. I recorded. A recorded vote has been requested. Pursuant to committee rule three, letter I. Uh, number two. Further proceedings on the amendment shall be postponed.
▶ 2:08:34Uh uh Mr. Vinman has uh an amendment at the desk. Amendment number four. The clerk will report the amendment and distribute it. Amendment number four offered by Mr. Vinman of Virginia.
▶ 2:09:27Second page. Gotcha. Okay. Thank you. The clerk
▶ 2:09:57having distributed the amendment and without objection, the amendment will be considered as read. I now recognize the distinguished gentleman, the sponsor of the amendment for up to five minutes for an explanation of his amendment. Thank you, Mr. Chairman. Frankly, I'm introducing offering this amendment that up until recently I thought was totally unnecessary.
▶ 2:10:18And um maybe I'm harping on this topic because I was a former ethics lawyer during the previous Trump administration. Um and I think government integrity, public integrity is an important issue. This amendment is about protecting both the integrity of our financial markets and the integrity of public service. But in recent years, we've seen the rise of meme-based financial assets, often built around public figures, including sitting officials.
▶ 2:10:49These aren't just inter internet jokes anymore. They're being traded, speculated on, and in some cases profited from. Just look at the president's memecoin. Yet, this industry should not suffer from the corruption of greedy This is a conflict of interest that undermines the legitimacy of both our government and our markets. My proposed amendment is simple.
▶ 2:11:13If you're a company trading crypto and seeking certification, you are banned from trading or offering services for meme-based assets tied to a sitting president, vice president, or any other federal public official. We are talking about rampant corruption. We are taking rampant corruption headon. The costs are too expensive not to. Holding public office is not a brand to be leveraged. It's not a meme and it certainly should not be used as a tool for personal gain.
▶ 2:11:43So I want to take a moment to uh turn to an article that was published in the New York Times on May 13th. The title is tiny company with China ties announces big purchase of Trump cryptocurrency.
▶ 2:11:57The sub headline is the firm which produces content for Tik Tok recorded no revenue last year but announced this week that a mysterious stock sale will allow it to invest heavily in Trump A struggling technology company that has ties to China and relies on Tik Tok made an unusual announcement this week. It had secured funding to buy as much as $300 million of Trumpcoin, the so-called memecoin marketed by President Trump.
▶ 2:12:28GD Culture Group, a publicly traded firm with Chinese subsidiary, has only eight its public violence show, and recorded zero revenue last year from an e-commerce business that operates on Tik Tok, the Chinese-owned video sharing. I'm not going to read the entire article, but I'll just read a couple of additional important excerpts. This purchase or the purchase would create clear ethical conflicts enriching Mr.
▶ 2:12:55Trump's family at the same time as the president tries to reach a deal that would allow Tik Tok to keep operating in the United States rather than face congressionally congressionally approved ban. A ban many of the members in this room voted for. Another section reads, "But any purchase by DG GD Culture Group would be the first known example of a China linked firm buying Mr. Trump's memecoin.
▶ 2:13:21In its financial disclosures, the company has noted that its subsidiary, and I'm going to butcher this, Shangshi Shinshu might be influenced by demands from the Chinese government, though that's not unusual wording for a Chinese company." in quotes, "The Chinese government may intervene or influence its operations at any time," the company said in its annual report.
▶ 2:13:44"As we consider the regulatory framework for cryptocurrency, we we have to consider these issues related to public integrity and in fact public officials that could profit from this. And you don't have to take my word for it. You could look at articles like this from New York Times. We're we're already facing a crisis of of corruption.
▶ 2:14:15And the idea that public officials could benefit financially from coins tied to their name or image. It only fuels that fire and it must be stopped. This amendment helps take on corruption. It ensures public service remains about the public and not about playing not playing a market built on internet hype.
▶ 2:14:35This amendment would ban companies trading crypto and seeking certification from listing or trading any memebased asset associated with federal public official including the president or vice president. It also strengthens the financial industry by drawing a clear line between legitimate innovation and improper political speculation. This clarity would benefit everyone from investors to the American people.
▶ 2:15:00And with that, I'll just close by saying to use the term coined by speaker Pelosi, let's drain the swamp. Let's do that by voting I on this amendment. Thank you. I yield back. Gentleman yields back. Any other members seek recognition to speak on this? Uh the ranking members recognized for five minutes. Thank you, Mr. Chairman. Uh, I thank the gentleman for offering this amendment.
▶ 2:15:24Obviously, the actions taken by certain members of this administration regarding affiliated meme coins have raised a host of ethical questions. And thank you, Mr. Benman, for leading on this issue. Um, let's remove any possibility of that pressure by passing this amendment and keeping these coins out of regulated markets.
▶ 2:15:47I applaud the gentleman from Virginia's ingenuity to keep these meme coins out of these markets and I urge the adoption of this amendment. Mr. Chairman, I yield back. Gentle lady yields back. Mr. Davis from North Carolina is recognized for five minutes. Mr. Chair, I stand on my previous comments. I support sunshine. I support public integrity. I support transparency. I support accountability. I support the gentleman from Virginia's amendment.
▶ 2:16:15And this is not politics, it's principle. I yield back. Gentleman yields back. Gentleman is Thank you, Mr. Chairman. Um, I'd just like to add that I I do believe that this is part of the regulatory framework that we are working on today. Um, I think by ignoring this issue, uh, it really leaves a gaping hole. A gaping hole that opens the doors to corruption for the highest office in the land.
▶ 2:16:43And we know that if you'd like to curry influence with this or with any other president, having this unlimited slush fund to dump money into invites massive ethical conflicts from insider training to consumer protection, which is what we are discussing in this committee today.
▶ 2:17:00And so for all those folks who participated in the trading of a certain coin that have lost their money uh believing that they made profit uh and were duped uh all the while certain people became uh not only much more wealthy but also uh you know preferred to talk with certain investors into those coins again invites a gaping creates a gaping hole that creates a massive ethical conflict that I think we want to avoid and I think we ought to hold ourselves as members of Congress
▶ 2:17:31uh to the same standards as the highest office in the land, the presidency. We should be on equal footing uh on that in that respect and I believe um that not doing so really is indefensible. So I fully support this amendment. Uh I thank you for your time and I yield back. Thank you, Mr. Chairman. Gentleman yields back now. Recogniz gentleman from California, Mr. Cost, for five minutes. Thank you very much, Mr. Chairman, and the ranking member.
▶ 2:17:54Um, I want to uh um commend uh the efforts that have gone on here with the majority and minority staff working together and and our chair and ranking member that will establish a bipartisan piece of legislation that we will mark up today. I also want to thank the hard work of my uh staff and and the work of Mr. Vina Gonzalez's office who my fellow blue dog on financial services worked together.
▶ 2:18:18uh the uh management the amendment that has been adopted uh the inclusion is in the manager's amendment would add additional uh requirements on how foreign terrorists and organizations utilize assets financing and report back to Congress on those uh actions creating new pathways are hard but I think we must do so because it's our job in Congress to craft legislation that will set us on a roadmap for the future uh the road map and this piece of legislation I think is very important.
▶ 2:18:48It must address national security, uh consumer protection, public resources, ultimately ensure that no conflict of interest is um can be um uh in involved. Uh whether you serve in the administration or whether you're a member of Congress or the president, nobody is above the law. This amendment needs uh continue to work and I promise that I will continue to do that with everyone involved. I'd be remiss if I didn't mention that this markup uh is over.
▶ 2:19:18We got to continue to work on a bipartisan uh farm bill for reauthorization. Um I yield back the balance of my time and thanks once again to the chair and to the ranking member. Gentlemen yields back. Any other members seek recognition to speak on Mr. Vinman's amendment number four? If not, um I will take the opportunity to do that. Once again, this is not the venue to discuss presidential ethics.
▶ 2:19:47At the end of the day, discussions around appropriate ethical limitations imposed on the president are not subject to this committee. They are the subject of the oversight committee. The focus of this committee and this legislation is not to tell the president what they can or cannot do. The purpose of this legislation is to give the American people a comprehensive regulatory framework so that it can participate in the digital asset ecosystem with confidence and certainty and let innovation flourish.
▶ 2:20:16For that reason, I oppose this amendment. Hearing no further conversation, the question is on amendment. All those of the on the amendment offered by Mr. Vinman, amendment number four. All those in favor of amendments signify by saying I. I. All those opposed by saying no. No. In the opinion of the chair, the nos have it. I ask for a record. Agreed to. A recorded vote has been requested pursuant to committee rule three letter I.
▶ 2:20:44Number two, further proceedings on the amendment shall be postponed. Um the ranking member uh Representative Craig has an amendment uh number 10 at the desk. Uh the the clerk will report the amendment and distribute it.
▶ 2:20:59Amendment number 10 offered by Miss Craig of Clerk
▶ 2:22:41having distributed the amendment without objection amendment will be considered as read. Now recognize the distinguished lady from Minnesota, the sponsor of the amendment for up to five minutes for an explanation of her amendment. Well, thank you, Mr. Chairman. Uh my amendment is very straightforward and very simple. Um, the Clarity Act that we are marking up today already amends the Commodity Exchange Act and to add digital commodities to the current list of financial products under the CFTC's jurisdiction.
▶ 2:23:11And it amends it such that members of Congress, judges, and federal employees cannot trade using non-public information that we might acquire from our jobs. We are also prohibited from sharing that information with others for them to trade in these products.
▶ 2:23:31My amendment simply ensures that all public officials are held to the same standard with respect to using or sharing non-public information for trading and digital assets and other products the CFTC overseas. It does this by simply adding the term quote executive branch employees end quote to that list prohibited from sharing that information with others as well. Mr.
▶ 2:23:59Chairman, I encourage my colleagues on both sides of the aisle to support this common sense amendment and I yield back. Gentle lady yields back to other members seeking recognition to speak on uh the gentle lady's amendment. Mr. Davis from North Carolina is recognized for five minutes. Mr. Chair, um there's a recurring theme here and we should stand for accountability here at all levels.
▶ 2:24:26Um so I continue to stand in full support um of this amendment and I thank the ranking amendment for bringing it The gentleman yields back. Other members seeking recognition to speak on the general ladies. Mr. Mr. Vasco is recognized for 5 minutes. Thank you, Mr. Chairman.
▶ 2:24:46Um, and I do just want to reiter reiterate a point on consumer protection uh in support of uh the ranking members bill and particular coins uh that uh have hurt consumers considerably. I think you know which coin I'm talking about. Uh but collectively individuals who invested into that coin have lost more than $2 Um, a large number of investors have experienced substantial financial losses related to this particular coin.
▶ 2:25:15Uh, the the folks in charge of this coin have made $und00 million. When the coin when the price peak was at $75, now it's about 16 or so. Um, so this is a regulatory function of this bill is consumer protection.
▶ 2:25:31And when you're using the likeness of the most powerful person in this country, Democrat or Republican, essentially in a way that rips off consumers that should be under the jurisdiction and regulation of a bill like this. Uh so I fully support this. Thank you, Mr. uh chair and ranking member. Gentleman yields. Any other members seek recognition to speak on uh Miss Craig's uh amendment number 10?
▶ 2:26:03Miss uh Mr. Delaney is recognized. Miss Mlan Delaney is recognized for five minutes. Thank you, Mr. Chair. Um, I wasn't going to step forward on this, but I have to say that, um, I really believe as elected officials, we work for the American people and that we should not only have avoid conflicts of interest, but we should even avoid the appearance of impropriety and conflict of interest and
▶ 2:26:33that there should not be conflicts of interest for elected officials and senior officials. I wholly support this amendment of uh Representative Craig as I did serve in the executive branch in the last administration and my husband and I ended up you know uh selling a lot of our assets just to make sure that there was no conflict of interest.
▶ 2:26:58Uh those in the executive branch um you know tone starts at the top. That's what we always say. Whether it's at a business, whether you are in an academic or nonprofit institution, or whether you're in government, the tone that you take permeates at all levels. And it is really important. And no, and the top top is our president.
▶ 2:27:23And to me, insider trading is not something we should even be thinking about as something that should be um inapplicable to any of us. any individual, any member, any elected and our top elected chief.
▶ 2:27:43So, I uh support this uh amendment because it really speaks to who we are as um members of Congress, as Americans, and who we want to be um in terms of character and creating a trustworthy environment and trustworthiness in this new um digital realm, which we all wholly support and want to make sure there are adequate bumpers and safeguards. With that, I yield back. General A yields back.
▶ 2:28:13Now recognize gentleman from South Dakota, uh, Mr. Johnson for five minutes. Mr. Chairman, I would note that these the last few amendments have been on issues that that are legitimate. Uh, there have been, I think, real and meaningful conversations going on about how best to address this arena. Uh, listen, we're not we're not ready.
▶ 2:28:34We we're not all together yet, but the conversations are going to continue in good faith uh frankly as they have throughout this conversation uh on fit 21 last congress as well as on the clarity act of this congress. Uh you know politics the out of the possible and I think there are a number of folks on this side of the dis that although they voted no on these amendments because we're just not there yet. I think we're getting closer. I know there's been some language uh that we've discussed and and I think we're going to continue to get closer.
▶ 2:29:03Uh I beg your indulgence uh Mr. Chairman. I might note also about CFTC reauthorization. Mr. Chairman, I think you said it exactly right. Clearly we we there's unonymity in here and that we need to reauthorize the CFTC. I think a clean reoff as was proposed uh was misplaced. My commitment I don't get to speak for Mr. Davis, but I know him well enough to know this is true. Listen, the subcommittee is going to work through CFTC reauthorization. We're going to do it in a bipartisan way. It will be collaborative.
▶ 2:29:33We may well wear you all out with meetings on the intricacies of the CFTC. and we will bring you a work product that reauthorizes the CFTC and does so in a way that's built on bipartisan common ground to strengthen the agency because we know that just as they uh dealt with the swaps regulation in the wake of DoddFrank that uh they're going to have an opportunity here to step up and and be that spot market regulator.
▶ 2:30:02Uh and one final note by way of closing, Mr. chairman, you know, we know that the CFTC already has market authority in this area. Um, now they it's anti-fraud. It's anti-manipulation. The problem with that existing authority is that it is after the fact once there's already been u, you know, bad faith actors in the space.
▶ 2:30:28One of the beautiful things about the Clarity Act is it takes this existing regulator and it provides them spot market regulatory authority so that not only can we uh deal with bad actors after the fact we can step up and we can try to make sure that the rules of the road limit u fraud abuse uh market manipulation that's going to strengthen this marketplace and uh we'll listen we'll make sure CFTC reauthorization continues that kind of bipartisan movement. forward. Mr.
▶ 2:30:58Johnson, would you yield? Absolutely. Thank you. I just wanted to tell everyone here today that uh we have had some productive conversations around the conflict of uh interest issues over the course especially of the last 72 hours um both on this committee as well as on the House Financial Services Committee.
▶ 2:31:18I think everyone recognizes and understands uh that these are ongoing um and um you know what happens out of this committee today notwithstanding with this legislation I think that um before this gets to the house floor we're going to have to continue to have those discussions. So we are um working productively uh both in both committees.
▶ 2:31:42Uh and my greatest hope is that we will be able to um resolve these issues before this bill gets to the House floor. So with that, thank you for yielding. I yield back. Yeah. And I would note that that is the ranking member is right and this has been a this has been a really good trust me exercise. Again, this town doesn't do that very well, but uh Mr. Davis, uh, Miss Craig, others were able, they were willing to be original co-sponsors of the bill, even though they said, "You know what? We need to make some changes.
▶ 2:32:10I'm going to take a step with you as we make those changes." We made those changes, and again, I think we're going to have a good bipartisan effort of people saying, "Okay, I'll take this next step with you, but the stew is not quite done cooking yet." Yes, Miss Craig, Mr. Johnson. Uh in that spirit, I'm going to offer to withdraw my amendment and uh we will keep working together. Thank you. I would thank the gentle lady and Mr. Chairman, I would yield back. Gentleman yields back. Gentle lady withdraws. Mr. Figer, you still seek to be recognized.
▶ 2:32:40No. No. Okay. Gentlemen, uh uh any other any other members wish to be recognized? Um very good. does any other member have an amendment not yet offered? All right. Hearing none, the measure is now closed.
▶ 2:33:10We'll now prepare the electronic voting system before we proceed to our previously postponed votes. Uh the first vote will be on amendment number seven. Uh Mrs. Mlan Delaney of Mer of Maryland. Amendment number seven. A recorded vote was requested. Uh members will record their votes using electronic voting system. The chairman intends to vote no.
▶ 2:33:39I now recognize the ranking member. Sorry about that. Oh, sorry. Uh the ranking member uh intends to vote yes. Okay. Okay, very good. The uh the clerk will open the vote and all members should vote using Mr.
▶ 2:34:07Chairman, I would remind members they'll need to turn on their remote. Some of they began turned off a number of them. Good. I don't know where she is.
▶ 2:34:39All right. Between John Rose and Mrs. Kamik, I can't even see the board. Sir, I need to swap that out. This one was withdrawn. Okay. And just like just to make it clear, you know, there's going to be like an interceding motion here.
▶ 2:36:29Give it a few minutes. Yeah, everybody was given fair warning.
▶ 2:37:10We'll I'm gonna hold Roen for a little bit. Yeah. I mean, I'm not first one. McGover's not wait. Don't need to wait. He's already told us he's on the floor right now. All Do we know whether Mrs. Da Cruz is in route? She is in route. She was at financial services is also holding a markup. So, she was speaking. So, she's running over. Okay. All right.
▶ 2:41:19Have all Have all members re All right. It's a noisy bunch. Have all members been recorded who wish to be recorded? Do any members wish to change their hearing. None. Will the clerk please close the vote and announce the tally? Mr. Chairman, on this vote, the yays are 24 and the nays are 29.
▶ 2:41:52The amendment is not adopted. The next amendment will be amendment offered by Mr. David Scott of Georgia. Amendment number one. recorded vote was requested. Members will record their vote using electronic voting system. The chairman intends to vote no. The ranking member intends to vote I.
▶ 2:42:21The clerk will open the vote. I hope I voted. Can't see them here. Must have. Have all Have all members recorded been recorded who wish to be recorded?
▶ 2:42:51Do any members wish to change their Hearing none. Will the clerk please close the vote and announce the tally? Mr. Chairman, on this vote, the yays are 24 and the nays are 29. The amendment is not adopted.
▶ 2:43:18I recorded The next vote will be uh amendment number two offered by Mr. David Scott of Georgia. A recorded vote was requested. Members will record their votes using the electronic voting system. The chairman intends to vote no. I now recognize the ranking member. The ranking member intends to vote I. The clerk will open the vote.
▶ 2:44:03Have all members been recorded who wish to be recorded? Do any members wish to change their vote? Hearing none, will the clerk please close the vote and announce the tally? Mr. Chairman, on this vote, the A's are 24 and the nays are 29. The amendment is not adopted.
▶ 2:44:30The next vote will be amendment number four offered by by Mr. Vinman. A recorded vote was requested. Members will record their votes using electronic voting system. The chairman intends to vote no. I now recognize the ranking member. Ranking member intends to vote I. The clerk will open the vote.
▶ 2:45:04Have all Have all members been recorded and wish to be recorded? Do any members wish to change their Hearing none, will the clerk please close the vote and announce the tally? Mr. Chairman, on this vote the y's are 24 and the nays are 29. The amendment is not adopted.
▶ 2:45:34Final vote will be on the amendment and the nature of a substitute as amended. All those in favor of the amendment including as amended by the manager's amendment. Okay. Now the final vote will be on the amendment and nature of a substitute as amended including a uh an amendment uh by the as amended by the manager's amendment. All those in favor of the amendment will signify by saying I I.
▶ 2:46:04All those opposed by saying no. In the opinion of the chair the eyes have it and the amendment is agreed to. Mr. Chairman, I would ask for a recorded vote. A recorded vote is asked for. Um, a recorded vote was requested. Will members will record their votes using electronic voting system? The chairman intends to vote I. And now recognize the ranking member. The ranking member intends to vote no.
▶ 2:46:33In the clerk will open a vote. Have all members been recorded who wish to be recorded?
▶ 2:47:04Do any members wish to change their Hearing none, the clerk will the clerk please close the vote and announce the Mr. Chairman, on this vote, the yays are 29 and the nays are 24. A majority having voted in favor of the amendment and the nature of a substitute is amended is is adopted. Is Mr.
▶ 2:47:33Davis still want to do this? Now I believe we now recogn now recognize the gentleman Mr. Davis from North Carolina for a motion. Mr. Chair, I move that the bill HR 3633 as amended be reported favorably to the House with the recommendation that it do pass.
▶ 2:48:03Does any member wish to discuss the motion? The ranking member is recognized. Thank you, Mr. Chairman. I um thank you for the recognition.
▶ 2:48:16Uh, I just want to say to the members of this committee that this has been a productive process, but I still believe while we're many of us are going to vote here today to advance this legislation that there is still some work to do uh before it gets to the House floor. And with that, Mr. Chairman, I yield back. Gentle yields back. Any other members wish to discuss the motion?
▶ 2:48:46Seeing none, the the question is on the motion offered by the gentleman from North Carolina, Mr. Davis, reportly favorably report HR3633 Bless you. All in favor signify by saying I. I all opposed by saying nay.
▶ 2:49:16Nay. In the opinion of the chair, the eyes have it. And the bill HR 3633 as amendment is ordered to be favor reported favorably to the house. Mr. Chairman, I would ask for recorded vote. Sir, a recorded vote has been requested. Members will record their vote using electronic voting system. The clerk will open the vote.
▶ 2:50:13Everybody voted. Have all members been recorded who wish to be recorded? Do any members wish to change their Hearing none, will the clerk please close the vote and announce the tally? All right, Mr. Chairman, on this vote, the A's are 47, the nays are six. Majority haven't voted in favor.
▶ 2:50:40The motion is agreed upon and HR 3633 will be reported favorably in the House just kind of keep the conversation down just a tad.
▶ 2:50:57A majority having um without objection, the usual instructions are given to staff that consist of making such technical and clarifying or conforming changes as are appropriate without changing the substance of Any members wishing to submit additional dissenting or minority views. Uh shall submit such views to the council's office room 1407 Longworth by Friday, June 13th at 12:00 noon. Uh this concludes today's business meeting.
▶ 2:51:26I thank all the members and this meeting is adjourned.