Republican lawmakers announced late Thursday the launch of a new subcommittee that will oversee the crypto and fintech industries, the first of its kind in the U.S., after a tumultuous period for digital currencies.
French Hill of Arkansas will chair the Subcommittee on Digital Assets, Financial Technology, and Inclusion, which will be part of the House Financial Services Committee.
Hill, who was also appointed vice chair of the broader committee, said in a statement that a bipartisan effort is needed for “FinTech innovation to flourish safely and effectively in the United States.”
The unregulated nature of the crypto industry emerged as a pressing concern late last year after the collapse in November of crypto exchange FTX. Sam Bankman-Fried, FTX’s founder, was arrested last month on fraud charges and was released on a $250 million bond while he awaits trial.
Hill has been an enthusiastic supporter of the crypto industry. In 2021, he co-sponsored the Central Bank Digital Currency (CBDC) Study Act and said at the time that it’s “important for the Federal Reserve to not delay its important work” on a potential CBDC.
In 2019, well before FTX became a household name, Hill signed a letter, urging the IRS to refine its tax guidance for cryptocurrency users.
“Ambiguity impedes appropriate tax compliance,” the letter read.
Other Republican crypto advocates in Congress have included Rep. Tom Emmer of Minnesota and Sen. Cynthia Lummis of Wyoming.
Though Bankman-Fried was operating out of the Bahamas, he was a skilled Washington operative, forging relationships with heavyweights like Rep. Maxine Waters, (D-Calif.) and Rostin Benham, chairman of the Commodity Futures Trading Commission. In the 2022 midterm races, Bankman-Fried gave almost $40 million in publicly disclosed contributions, mostly to Democrats. He and his associates donated to politicians on both sides of the aisle.
Federal regulators have alleged that Bankman-Fried committed criminal campaign finance violations while perpetrating an $8 billion fraud.
FTX’s collapse and Bankman-Fried’s subsequent indictment have provided Republicans like Emmer ample fodder to criticize the work of regulators. Emmer described actions taken by Securities and Exchange Commission Chair Gary Gensler as “haphazard and unfocused.”
Senate Democrats, meanwhile, have already begun to prepare their own efforts to oversee the crypto industry and dictate enforcement actions.
The SEC has stepped up its level of activity since FTX spiraled into bankruptcy. The commission charged crypto lender Genesis and crypto exchange Gemini with the unregistered sale and offering of securities on Thursday, the same day that Hill announced the subcommittee.