A US House Financial Services Committee subcommittee convened Thursday to examine differing approaches to digital asset oversight at the Securities and Exchange Commission. The hearing, held by the Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence, brought into focus a broader debate about whether regulators are keeping pace with rapidly evolving financial technology. Lawmakers on both sides of the aisle raised questions about the direction of federal crypto policy.
Representative Stephen Lynch of Massachusetts, the subcommittee’s ranking member, said he fully supported the idea that innovative technology could serve the public good, but raised concerns about recent regulatory shifts in the United States. He pointed to the dismantling of enforcement teams responsible for addressing scams and fraud, as well as the closure of FinHub, the SEC office dedicated to building the agency’s technical expertise on digital assets and financial technology. Lynch framed these moves as steps backward in consumer protection.
Lynch’s remarks came in the context of the SEC, under President Donald Trump, dropping investigations and enforcement actions against several crypto companies, including Ripple Labs and Coinbase. Some executives at those firms have reported ties to the current administration. Trump nominated Paul Atkins to lead the SEC following the January 2025 departure of former chair Gary Gensler.
Subcommittee chair Representative Bryan Steil expressed concern about whether regulators were adequately prepared to handle technologies such as digital assets. He indicated that Congress bears responsibility for providing regulatory clarity and reducing fragmentation and uncertainty in the market. Steil also alluded to a crypto market structure bill currently moving through the Senate.
Earlier this month, the SEC and the Commodity Futures Trading Commission signed a memorandum of understanding aimed at coordinating oversight of financial markets, including digital assets. Shortly after, the SEC issued an interpretative notice outlining how it intends to treat crypto assets under existing federal securities laws. These steps were presented as efforts to bring greater coherence to a regulatory landscape that has long been described as fragmented.
SEC Chair Atkins described the commission’s approach as a regulatory bridge intended to clarify crypto rules while Congress remains stalled on passing the CLARITY Act, a proposed bill that would establish a market structure framework for digital assets. The legislation, if enacted, is expected to expand the CFTC’s authority over cryptocurrency markets. The outcome of that legislative effort is seen as a key factor in shaping the long-term regulatory environment for the sector.
Originally reported by CoinTelegraph.
