Oklahoma’s Frank Lucas could be key congressman in cryptocurrency regulation

Most Oklahomans in all probability consider third District Congressman Frank Lucas as an “ag man.”

And he’s. A farmer and rancher himself, Lucas is a former Home Agriculture Committee chairman and was accountable for the 2014 farm invoice.

However Lucas can be a “finance man” and is in an uncommon place to affect laws arising from the FTX cryptocurrency collapse. When the 118th Congress gavels in on Jan. 3, Lucas expects to be a senior member of the bulk on two committees with the potential for important crypto duties.

Lucas has been a member of what’s now the Home Monetary Providers Committee since shortly after he entered Congress in 1994 and is its longest-serving Republican. He additionally expects to return to the Agriculture Committee after a several-year hiatus.

Ag’s involvement in cryptocurrency would possibly shock some, nevertheless it oversees the Commodity Futures Buying and selling Fee, or CFTC. The general public most associates the CFTC with hog bellies and grain futures, nevertheless it additionally regulates complicated monetary devices — which is what many think about cryptocurrency to be, Lucas stated.

Monetary Providers regulates the Securities and Change Fee, whose primary job is policing markets towards fraud and manipulation. Some individuals imagine cryptocurrency falls into that class, too.

Topline

The House passed legislation Wednesday evening that would give oversight authority over most forms of cryptocurrency to a more industry-friendly agency—potentially putting President Joe Biden in the difficult position of deciding whether to go against his own SEC chairman and refuse a veto as former President Donald Trump courts the industry in his 2024 presidential campaign.

The White House said Wednesday it “opposes” the legislation, but stopped short of saying President … [+] Joe Biden would veto the bill.

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Key Facts

The House voted 279-136 to pass the “Financial Innovation and Technology for the 21st Century Act,” with 71 Democrats and 208 Republicans voting in favor of the legislation.

The legislation would put most forms of cryptocurrency, including bitcoin, under the regulatory purview of the Commodity Futures Trading Commission by classifying them as commodities, rather than securities that would fall under the authority of the Securities and Exchange Commission, which has executed a crackdown on the industry under Biden.

Lawmakers who supported the bill touted it as a way to clarify regulatory authority for digital assets, with digital assets subcommittee chair Rep. French Hill, R-Ark., calling it perhaps “the most substantial piece of digital asset legislation in Congress’s history,” he told Forbes previously, noting Trump supports the bill.

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Chief Critic

The SEC’s crypto crackdown, which includes a series of charges against companies and individuals it accuses of violating federal regulations, has become a new attack line for Trump against Biden as the former president courts crypto backers, telling them at a Mar-A-Lago dinner earlier this month they “better vote” for him, Politico reported. SEC Chair Gary Gensler opposed the House legislation, arguing Wednesday it would allow crypto issuers to “self-certify” that they are issuing crypto as a commodity rather than a security, giving the SEC a limited 60-day window to review the classification.

Crucial Quote

“The self-certification process contemplated by the bill risks investor protection not just in the crypto space; it could undermine the broader $100 trillion capital markets by providing a path for those trying to escape robust disclosures, prohibitions preventing the loss and theft of customer funds, enforcement by the SEC, and private rights of action for investors in the federal courts,” Gensler said Wednesday.

What We Don’t Know

Whether the Democratic-controlled Senate will pass the legislation. Eight House Democrats who backed the bill urged their Senate colleagues to support it in a memo Tuesday, CoinDesk reported. In a potential bellwether for the House bill, 11 Senate Democrats, including Majority Leader Chuck Schumer, D-N.Y., voted alongside Republicans earlier this month to undo crypto SEC regulations, splitting with Biden, who said he’ll veto the bill, which also passed the House with bipartisan support.

Key Background

Trump has embraced crypto after criticizing the industry during his time as president, tweeting in 2019 that he’s “not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air.” He has since launched a line of NFT “trading cards” featuring his likeness and his $7 billion net worth is comprised of about $3 million in digital assets, according to a March Forbes estimate. The Biden administration, meanwhile, has taken a measured approach to crypto, acknowledging its explosive growth and the need for the U.S. to “maintain technological leadership in this rapidly growing space,” while also warning it “has substantial implications for consumer protection, financial stability, national security, and climate risk,” the White House wrote in a 2022 executive order.