According to CoinDesk, four nominees for regulatory positions in the Biden administration were questioned by the Senate Banking Committee during a confirmation hearing. The topic of cryptocurrency was raised a few times, including during the questioning of Caroline Crenshaw, a commissioner of the U.S. Securities and Exchange Commission (SEC), on bitcoin trading products.
Crenshaw informed senators that due to the high levels of fraud in crypto markets, she was unwilling to approve bitcoin exchange traded products earlier this year. Despite the SEC losing a court battle with Grayscale and reversing its position on bitcoin spot exchange traded funds (ETFs), Crenshaw maintained her opposition to these trading products. She expressed concern that these products could potentially harm investor protection.
Crenshaw reiterated her stance, stating that she had to oppose it due to the significant fraud in the underlying spot markets globally. She expressed concern that these products could flood the markets and negatively impact the retirement accounts of U.S. households. Crenshaw's agency is currently in the process of approving trading products for Ethereum's ether.
The committee also heard testimony from Christy Goldsmith Romero, a member of the Commodity Futures Trading Commission (CFTC) who President Joe Biden nominated to chair the Federal Deposit Insurance Corp.; Kristin Johnson, another CFTC commissioner, to be the Treasury Department's assistant secretary for financial institutions; and Hawaii Insurance Commissioner Gordon Ito to be a Member of the Financial Stability Oversight Council.
Crenshaw has served as a commissioner at the SEC for four years, having been unanimously confirmed in the Senate. During her tenure, she has supported the approach to the digital assets sector led by SEC Chair Gary Gensler, who believes that crypto tokens should mostly be treated as securities that must be registered with the agency.
The nomination process for financial watchdogs requires approval initially in this committee, then a vote by the entire Senate. The hearing also briefly raised the question of the custody of digital assets at U.S. banks. Sen. Cynthia Lummis asked Goldsmith Romero about her view on banks handling customers' cryptocurrency and doing other business with digital assets firms. Goldsmith Romero responded that she doesn't believe it's the FDIC's role to dictate which industries or companies banks should provide services to.