The US law on cryptocurrencies, DeFi, and financial scams

According to what has emerged in the last few hours, the US House Financial Services Committee is about to face many discussions related to cryptocurrencies, DeFi, and “pig butchering” scams, with the possibility of approving a specific law by the end of the year.

September will be a very intense month under the lens of cryptocurrency regulation in the United States, as the SEC prepares to testify before the House and the Senate.

At stake are several relevant issues for the future of the sector, including the potential integration of the “Financial Innovation and Technology for the 21st Century Act” (FIT21) program.

Summary

• The Financial Services Committee of the House in US prepares to discuss cryptocurrencies and DeFi
• A specific law for cryptocurrencies is coming by the end of the year in US
• Under pressure Gary Gensler and the SEC

The Financial Services Committee of the House in US prepares to discuss cryptocurrencies and DeFi

As reported by the online newspaper Coindesk, the Financial Services Committee of the House in the US will have a lot to do in September, when they will discuss crypto and DeFi laws.

An informed insider regarding the Committee’s planning has revealed thatthere will be several meetings next month, with the SEC being called to testify.

In particular the first relevant debate will be on September 10, where the focus of attention will be given to the regulation of the decentralized finance (DeFi) environment. Until today, US regulators have not provided clear guidelines for this niche, but at the same time, they have spoken about it with a negative connotation.

The stessa SEC ha recentemente affermato che la maggior parte degli scambi decentralizzati sono broker non autorizzati che offrono servizi inerenti ad asset non registrati.

Following on September 18/19, the Financial Services Committee will host two hearings, one in the morning and one in the afternoon. They will discuss application practices for financial companies and cryptographic scams related to “pig butchering” practices.

This is a complex technique of scam where the fraudsters try to establish an emotional relationship with the victim before inviting them to fraudulent investments in cryptocurrencies.

Today something non-technical:

What is a Pig Butchering Scam?

Like other threats in the Web3 space, one particularly insidious type of scam that has gained notoriety is known as the “pig butchering” scam. The idea behind the term refers to being kind to the pig by offering… pic.twitter.com/6wWtQxlVQs

— CharlesWang (@CharlesWangP) August 7, 2024

Finally, on September 23/24, there will be a more in-depth meeting where the Committee might start to get serious, even calling the SEC to testify.

It is said that the panel of the Chamber is seeking the testimony of the president Gary Gensler and the rest of the five-member commission in the same hearing.

The reporter from the newspaper Politico reported on X that among the witnesses there will be Martin J. Gruenberg from the Federal Deposit Insurance Corporation.

It is evident that the issues related to the regulation of cryptocurrencies are beginning to attract the attention of legislators. All the matches for the future laws of the cryptographic sector will be played in the coming weeks.

New: Gruenberg is tentatively slated to testify at House Financial Services Sept. 19, I’m told.

The committee is also expected to hear from the full SEC commission Sept. 24, mark up TBD legislation Sept. 26, and hold several hearings.

For @POLITICOPro: https://t.co/ki2c8w4DoR

— Eleanor Mueller (@Eleanor_Mueller) August 29, 2024

A specific law for cryptocurrencies is coming by the end of the year in US

As mentioned, by the end of the year, a law could finally arrive in the US that regulates DeFi and cryptocurrencies once and for all.

The timing of the political calendar is justified not only by the latest appointments of the House Financial Services Committee, but above all by the end of the mandate of its President.

The Republican representative Patrick McHenry, will indeed retire at the end of the year but could leave a mark in the cryptographic sector.

In one of his recent speeches, he revealed that one of his priorities at the moment is to establish clear federal regulations regarding cryptocurrencies.

“We will have a cryptographic law by next year, and I can say it with certainty. Cryptographic policy is inevitable and cryptographic law is inevitable”.

The same McHenry is reportedly pushing for the crypto law “Financial Innovation and Technology for the 21st Century Act” (FIT21), previously rejected by Biden.

This represents legislation that supports DeFi and cryptocurrencies, with the CFTC being appointed as the primary regulator of digital assets.

The President of the Committee feels confident that this regulation will finally be definitively approved during the next session of Congress in 2025

In May, the proposed law was approved by over a third of the house democrats (usually against cryptocurrencies) with bipartisan support.

The FIT21, in addition to having passed the House with a vote of 279-136 (including 70 favorable Democrats), had also obtained the green light from the Senate.

Here is what McHenry recently reported while discussing the crypto law in the US:

“Fundamentally we have a consensus product out of the House of Representatives. This is a huge thing that we need to take advantage of and leverage into law”.

The President’s veto weakens protections for consumers in digital asset markets and upends decades of custody rules.

By rejecting the bipartisan consensus of Congress, the Administration is doubling down on its failed approach.

Senate action on #FIT21 is more urgent than ever. https://t.co/AoN3rvPndt

— Patrick McHenry (@PatrickMcHenry) June 1, 2024

In the financial markets, the terms “bull” and “bear” are often used to describe market trends. A “bull” market is characterized by rising prices, while a “bear” market is marked by falling prices. Understanding these terms is crucial for investors.

Under pressure Gary Gensler and the SEC

In such a hectic moment in US for the discussion of upcoming laws regarding cryptocurrencies and DeFi, Gary Gensler and the SEC seem to be under pressure.

The president of the federal agency in charge of overseeing the markets will have to speak in September before the House Financial Services Committee.

In the same month, he will also have to testify before the Senate, adding more fuel to the fire in an already heated context.

The topics that will be covered will be numerous but will range, as mentioned, from crypto scams, to decentralized finance, and even to recordings.

At the center of attention there will certainly also be the modus operandi advanced by the SEC in recent years to carry out checks on companies related to cryptocurrencies.

In particular, the bullismo exercised by the agency towards the various Ripple, Uniswap, Coinbase, Binance, Kraken was not appreciated by the supporters of digital resources.

Legislators might question Gensler on how he determined that the cryptocurrencies offered by these companies are considered “security”.

It is now publicly known, in fact, how the head of the SEC ambiguously considers almost all crypto assets as securities (and the brokers who manage them as unauthorized).

This sounds very strange to the students who just a few years ago were listening to Prof. Gensler’s lecture on security asset, in which he stated exactly the opposite.

In the meeting, he said that 75% of cryptocurrencies are not securities. What has changed now?

The video Gensler doesn’t want you to see.

Before becoming SEC Chair he was a professor at MIT who would occasionally comment on crypto.

Just a few years ago he was telling students 75% of cryptoassets are NOT a security EVEN in the US.

What changed?

pic.twitter.com/FIFbFeMzkV

— Luke Martin (@VentureCoinist) August 28, 2024

In the world of finance, the terms “bull” and “bear” are often used to describe market trends. A “bull” market is characterized by rising prices, while a “bear” market is marked by falling prices. Investors need to understand these concepts to make informed decisions.

The latest attack by the SEC against the blockchain sector occurred a few days ago, and it was directed at the NFT marketplace Opensea.

In a Wells Notice letter the exchange has been called into question for the alleged sale of unregistered financial resources in the US.

The experts in the field like Hayden Adams have already spoken out on X to combat this ongoing persecution. He even called the SEC agents “clowns”.

While we await the next updates on a law for cryptocurrencies and DeFi, we know that the upcoming events in the US political schedule will be very heated

Welcome to the fight ⚔️

In crypto an SEC wells notice means you’re a legit company building an important product in the US

SEC are clowns taking the idiotic stance that digital art magically transforms into a security when it’s put on a blockchain https://t.co/B4wTOLU6ir

— Hayden Adams 🦄 (@haydenzadams) August 28, 2024

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