Posted: Jun 21, 2022 12:01 AM
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Earlier this month, Senators Lummis and Gillibrand released their much-anticipated cryptocurrency legislation, the first serious attempt by Congress to create a regulatory framework for cryptocurrency and other digital assets. No doubt some cryptocurrency enthusiasts are weary of the government attempting to regulate non-state-backed currency. Even so, this legislation represents an important step in reining in the regulatory state by putting questions about the future of cryptocurrency into the hands of Congress.
To understand why this legislation presents such an opportunity it’s important to understand that cryptocurrency is currently primarily regulated via enforcement by the Securities and Exchange Commission (SEC). Its chairman, Chairman Gary Gensler, has attracted criticism for his lack of clarity for cryptocurrency products and the large fines the SEC has levied. Examples include penalizing BlockFi $100 million for their lending product, and denying Coinbase the ability to create their own lending product. The SEC, which isn’t an enforcement agency