On July 26, the U.S. House Financial Services Committee gathered a major discussion to establish clear guidelines for the nation’s crypto market regulations. In his opening remarks, the chairman of the Financial Services Committee discussed the Howey Test, market structure and cryptocurrency laws.
The whole crypto ecosystem legislation recognises a crucial market issue, namely the treatment of digital assets as securities, according to Patrick McHenry, the chairman of the House Financial Services Committee.
Patrick McHenry said, “Just because digital assets are included in an investment contract does not automatically turn them into securities.”
In order to illustrate how the Howey Test applies to digital assets, the GOP chair stated that their measure related to digital currencies focuses on two crucial issues, namely decentralisation and functionality. He further said that this will aid the authorities going forward and that it is also the “crux of the FIT of 21st Century Act.”
The House Financial Services Committee’s FIT for the 21st Century Act is seen as a crucial first step towards establishing legislative clarity for virtual assets.
However, this will give the market reliable, tried-and-true user protection and make the regulatory climate more favourable for its growth.
The key crypto asset-related companies like Voyager Digital, Celsius Network and FTX failed last year, which led to the regulatory investigation of the cryptocurrency sector. The collapse of FTX alone cost the cryptocurrency market almost $40 billion.
The United States has been a pioneer in technological innovation for more than a century, benefiting mankind for over a long time.
However, the US runs the risk of falling behind other nations that have implemented clear legislation regarding digital assets. The GOP head noted that the Committee is currently taking the first move to close this regulatory gap.
