Hearings to examine exploring bipartisan legislative frameworks for digital asset market structure

Digital Assets and Bank RegulationSenate Banking, Housing, and Urban Affairs Subcommittee on Digital Assets · June 24, 2025 · 119th Congress
The Senate Banking Subcommittee on Digital Assets held this hearing to explore bipartisan legislative frameworks for regulating digital asset market structure, building on the recently passed GENIUS Act stablecoin law. Begins at ▶ 0:29:55
Transcript
Highlights

Title

Bipartisan principles for digital asset market structure legislation

Purpose

The Senate Banking Subcommittee on Digital Assets held this hearing to explore bipartisan legislative frameworks for regulating digital asset market structure, building on the recently passed GENIUS Act stablecoin law. Chair Cynthia Lummis opened by releasing five joint principles for market structure legislation signed by Chairman Scott, Sen. Tillis, Sen. Hagerty, and herself, and the panel of witnesses discussed how to divide jurisdiction between the SEC and CFTC, protect consumers, and prevent U.S. innovation from moving offshore. Begins at▶ 0:29:55

Who spoke

• Sen. Cynthia Lummis (R-WY), Chair▶ 0:29:55: Opened the hearing, congratulated Ranking Member Gallego on his newborn son▶ 0:29:55, and detailed five bipartisan market structure principles released that morning covering legal status of digital assets, jurisdictional allocation, modernized registration, consumer protection, and targeted illicit-finance rules▶ 0:31:53; later pressed for bipartisan input on final legislation and questioned why the issue has become partisan▶ 1:39:23▶ 1:40:55.

• Sarah Hammer, Wharton School / University of Pennsylvania▶ 0:35:38: Presented research showing the U.S. lost its lead in digital asset activity to other regions between 2021-2025▶ 0:37:30 and that the EU's 2023 MiCA regulation appears to have accelerated, not suppressed, activity▶ 0:37:30; cited Singapore's compliance framework as a useful model▶ 1:00:45 and described blockchain use cases in supply-chain tracking and remittances▶ 1:22:36.

• Greg Xethalis, General Counsel, Multipoint Capital▶ 0:41:05: Said unclear U.S. rules push founders to set up abroad and endorsed the House CLARITY Act and Senate market-structure principles as complementary▶ 0:42:00; cited a drop in the U.S. share of global blockchain developers from 42% (2018) to 24% (2024) per the Electric Capital report▶ 0:44:22.

• Ryan Van Grack, VP of Legal, Coinbase▶ 0:46:23: Said more than 52 million Americans (one in five adults) own digital assets in a market exceeding $3 trillion globally▶ 0:46:56; called the SEC's prior "regulation by enforcement" approach "devastating," describing Coinbase facing subpoenas and a Wells notice instead of rulemaking▶ 1:09:34▶ 1:29:51.

• Rostin Behnam, former CFTC Chair, Georgetown University fellow▶ 0:51:37: Argued a persistent regulatory gap for non-security digital assets has fueled fraud and manipulation and must be closed by statute▶ 0:52:06; said nearly 50% of the CFTC's FY2024 enforcement docket was crypto-related despite the agency lacking jurisdiction over that market▶ 1:38:02; emphasized customer-asset segregation as the top bankruptcy protection priority▶ 1:25:41.

• Sen. Bernie Moreno (R-OH)▶ 1:14:32: Asked why digital asset policy has become partisan when it wasn't for the "Sears catalog going digital"▶ 1:14:32; argued fear, not principle, is holding back regulation and later asked witnesses what "the price of failure" would look like▶ 1:34:10.

• Sen. Angela Alsobrooks (D-MD)▶ 1:21:06: Thanked Sens. Lummis and Gallego for GENIUS Act collaboration▶ 1:21:06; cited Baltimore's use of blockchain to track vacant housing lots▶ 1:21:40 and asked witnesses which digital asset technologies provide the most tangible public benefit▶ 1:22:10.

• Sen. Tim Sheehy / gentleman from Pennsylvania — Sen. Dave McCormick (R-PA)▶ 1:26:40: Asked rapid-fire questions on venture investment trends, tokenization's legal implications for traditional institutions, and how to balance new registration pathways with SEC/CFTC capacity▶ 1:26:40.

• Sen. David Hagerty (R-TN)▶ 1:07:42: Credited as the lead sponsor of the GENIUS Act; asked Van Grack and Behnam about the impact of "regulation by enforcement" on firms' ability to operate and invest in the U.S.▶ 1:07:42▶ 1:09:34.

Key moments

• Lummis released five bipartisan digital asset market structure principles, signed with Chairman Scott, Sen. Tillis, and Sen. Hagerty, covering legal classification, regulatory jurisdiction, modernized registration, consumer protection, and targeted illicit-finance rules▶ 0:31:53.

• Hammer testified that while North America led global digital asset activity in 2021-2022, other regions have nearly closed the gap by 2025 and are poised to surpass the U.S., and that the EU's MiCA regulation appears to have accelerated rather than suppressed market activity▶ 0:37:30.

• Xethalis cited a drop in the U.S. share of global blockchain developers from 42% in 2018 to 24% in 2024, per the Electric Capital Developers Report▶ 0:44:22.

• Van Grack said the SEC's prior enforcement-first approach was "devastating" — three years ago Coinbase sought rulemaking and instead received subpoenas and a Wells notice▶ 1:09:34▶ 1:29:51.

• Behnam disclosed that nearly 50% of the CFTC's FY2024 enforcement docket was crypto-related, despite the agency having no clear statutory authority to regulate that market — evidence, he said, of widespread undetected fraud▶ 1:38:02.

• Moreno asked witnesses why digital asset regulation had become partisan; Hammer, Xethalis, Van Grack, and Behnam each replied it should not be, with Behnam noting he called for statutory change as early as 2018-2019 under the first Trump administration▶ 1:14:32.

• Moreno requested the exchange be distributed to the full Banking Committee as evidence of bipartisan consensus that Congress "squandered the last four years" without acting▶ 1:38:46.

• Lummis suggested that partisan tension may stem from concerns that administration family members involved in digital assets could be advantaged by new rules, saying she wants no one to have unfair advantage▶ 1:41:17.

• Behnam described the "reasonable expectation" test problem: no digital asset is inherently a security, but the transaction surrounding it can be, which he said the SEC "belatedly conceded" after courts weighed in▶ 1:06:55.

• Behnam said customer asset segregation in bankruptcy is the top consumer-protection priority for market structure legislation, ensuring customer funds are returned rather than treated as part of an insolvent intermediary's estate▶ 1:25:41▶ 1:26:13.

Metadata

CommitteeSenate Banking, Housing, and Urban Affairs Subcommittee on Digital Assets
Chamber / CongressSenate · 119th Congress
DateJune 24, 2025
TypeMeeting
Witnesses
(none listed in event metadata)
Videosenate-isvp
Transcript181 caption blocks · 9,169 words · 1:42:34 runtime
EventCongress.gov 337108