The U.S. Senate Banking Subcommittee on Digital Assets held a hearing titled “Exploring Bipartisan Legislative Framework for Digital Assets Market Structure,” where a panel of experts urged Congress to pass digital asset legislation as soon as possible. Notably, the word “Bitcoin” was never mentioned during the hearing, although Bitcoin would be subject to the regulations discussed, making it relevant for Bitcoin enthusiasts to understand the proceedings.
The hearing followed the release of principles for digital asset market structure by Senators Cynthia Lummis (R-WY), Thom Tillis (R-NC), Bill Hagerty (R-TN), and Senate Banking Chairman Tim Scott (R-SC). Senator Lummis presided and jokingly noted that with the Senate’s passage of the GENIUS Act, the U.S. is moving into the 21st century financially. The hearing also included Senators Bill Hagerty, Bernie Moreno (R-OH), Angela Alsobrooks (D-MD), and Dave McCormack (R-PA), along with witness panel: Sarah Hammer (Executive Director, Wharton School, University of Pennsylvania), Greg Xethalis (General Counsel, Multicoin Capital; Board Member, Blockchain Association and DeFi Education Fund), Ryan VanGrack (Vice President of Legal, Coinbase), and the Honorable Rostin Behnam (Distinguished Fellow, Psaros Center for Financial Markets & Policy, Georgetown University; former Chairman, U.S. Commodity Futures Trading Commission).
Combating Illicit Activity in Crypto
In the first round of questions, Senators Lummis asked about addressing illicit activity. Both Behnam and Hammer stressed the importance of clear anti-money laundering (AML) and anti-terrorist financing rules, though details were not provided. When asked which country the U.S. should emulate, Hammer cited Singapore. Behnam warned that the longer Congress delays comprehensive market structure legislation, the more space it gives to bad actors: “Bad actors will gravitate toward areas that are unregulated.”
Consumer Protection for Crypto Investors
Senator Hagerty, lead sponsor of the GENIUS Act, praised bipartisan efforts and called for momentum. The sole Democratic senator present, Alsobrooks, expressed optimism about crypto’s potential but emphasized consumer safeguards. She asked Behnam about essential consumer protections for crypto investors. Behnam identified “bankruptcy protection” as the most important element: “Customer assets must be fully segregated so that there’s no question in the event of a bankruptcy that assets will be returned to customers.”
The Price of Failing to Legislate on Crypto
Senator Moreno asked the panel how much time the U.S. has to pass crypto regulation and what the cost of inaction would be. Xethalis responded “we have to act now,” outlining two major costs. First, other jurisdictions may enact more onerous rules, causing global friction—citing Europe’s strict internet commerce rules as precedent. Second, the economic cost: the U.S. is already behind in 5G and silicon chip manufacturing, and Xethalis warned against letting the same happen with crypto.
A Call for Bipartisanship
Senator Lummis closed by urging bipartisan discussions and cross-aisle cooperation, as she has done with Senator Gillibrand. She noted that some Democrats have been reluctant to engage in crypto legislation because of President Trump’s family involvement, but stressed that crypto is bigger than that and Democrats should recognize the importance of the industry.