Executives of major cryptocurrency firms stepped into the glare of congressional scrutiny for the first time on Wednesday, telling lawmakers the burgeoning industry needs federal oversight but resisting some of the hard-line policies that regulators have advocated.
One flash point was whether digital tokens will be classified as securities that should be policed by the Securities and Exchange Commission. Testifying before the House Financial Services Committee, Coinbase Global Inc. CEO Alesia Haas said she disagrees with such an approach, arguing that decades-old rules designed for assets such as stocks aren’t appropriate for digital tokens.
The nearly five-hour-long hearing could help further legitimize crypto, though it also revealed the difficulties federal officials face in regulating the industry. Leaders of Coinbase, Circle Internet Financial Inc., the FTX derivatives exchange and other firms endured a battery of questions on how their businesses should be overseen, and the executives answered without getting into controversial arguments. Still, the clear partisan divisions that emerged between lawmakers showed that the prospects for passing legislation to regulate crypto are dim.