US House Rules Committee Debates Crypto Bills to Prevent Future FTX Collapses

On Monday, the US House Rules Committee convened to discuss three significant crypto bills, with a particular focus on the Digital Asset Market Clarity (CLARITY) Act. Introduced at the end of June, the CLARITY Act aims to establish a clear regulatory framework for the crypto industry. Republican representative French Hill warned that without such regulations, the crypto market could face more collapses similar to the FTX incident.

Hill emphasized that the current regulatory environment lacks the necessary protections for consumers, which could lead to future FTX-like situations. He highlighted that the CLARITY Act includes strict consumer and market protections, such as prohibiting the co-mingling of customer funds, ensuring adequate capital reserves, and maintaining transparent record-keeping. These measures directly address the issues that contributed to FTX's downfall.

Hill argued that the existing regulatory framework is plagued by gaps that leave consumers unprotected and investors confused. The CLARITY Act seeks to close these regulatory gaps by providing clear definitions of digital commodities and assets, specific disclosure requirements for fundraising, and retail investor protections. It also grants authority and oversight of centralized exchanges to the Commodities and Futures Trading Commission.

In addition to the CLARITY Act, the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act will also be debated and voted on. This legislation provides a regulatory framework for stablecoins, setting rules for issuers, reserve transparency, and allowing banks to participate. The Anti-CBDC Surveillance State Act, which aims to prevent the Federal Reserve from issuing a central bank digital currency, is also up for debate and a vote this week.

On Tuesday, July 15, policymakers will begin discussing the bills, and voting will start when the debate ends. The outcome of these discussions and votes could significantly impact the future of the crypto industry in the US, potentially preventing future collapses and providing much-needed clarity for investors and consumers.