US lawmakers seek to speed crypto legislation as DOJ signals retreat on enforcement
Quick Take In a new Congress, lawmakers are quickly working to pass both a stablecoin bill and a market structure bill. Some Democrats on Wednesday raised concerns over the Department of Justice’s move to shutter its crypto litigation division

U.S. lawmakers are escalating their efforts to draft legislation to regulate crypto as a whole, while some have raised concerns about recent moves to cut crypto enforcement.
During a Wednesday hearing of the U.S. House Financial Services Committee, lawmakers unpacked their next move to regulate crypto following advancements to write rules for stablecoins.
"It's incumbent on us to build on that momentum and continue working towards a comprehensive regulatory framework that establishes clear rules of the road for digital asset markets," said House Financial Services Committee Chair French Hill, R-Ark.
There is no federal regulatory framework for digital assets, and the crypto industry has long argued that rules for the industry are unclear. In a new Congress, lawmakers are quickly working to pass both a stablecoin bill and a market structure bill.
Over the past few weeks, committees in the House and Senate have advanced bills to regulate that set parameters around reserve requirements, among other standards for stablecoin issuers. Those bills held a majority of Republican support, but picked up several Democratic votes as well.
Wednesday's hearing focused on that second piece, the market structure bill. Rep. Bryan Steil, R-Wisc., has said he views both market structure and stablecoin legislation as "linked" and that President Donald Trump is interested in having both bills on his desk as soon as possible.
The release of market structure legislation could be coming soon, according to House Financial Services Committee Chair Hill. He said previously that a particular version of a market structure bill could be similar to one worked on over the years. That bill, called the Financial Innovation and Technology for the 21st Century Act, nicknamed FIT 21, passed the House last year with 71 Democrats voting in support of the bill, including former Speaker of the House Rep. Nancy Pelosi of California.
Given its complexity, passing such a bill is viewed as more challenging than passing a bill to regulate stablecoins.
Some Democrats on Wednesday raised concerns over the Department of Justice's move to shutter its crypto litigation division. Earlier this week, Todd Blanche, U.S. deputy attorney general, said in a memo that the DOJ is "not a digital assets regulator." Blanche also previously represented Trump in criminal cases.
Rep. Sylvia Garcia, D-Texas, pushed back on Blanche's assertion on Wednesday.
"Well, if they're not, then who is, and what does that leave?" Garcia said, later pointing to the Securities and Exchange Commission's move to drop several crypto-related cases.
Some lawmakers seemingly agreed that some action is needed to regulate crypto. Rep. Brad Sherman, D-Calif., who is often critical of the digital assets industry said he agreed that the Howey Test — 1946 U.S. Supreme Court case frequently cited by the SEC to determine if an asset qualifies as an investment contract and, therefore, a security— may not be suitable.
"I'll agree with a lot of the pro crypto folks here who have said it's kind of silly that we're determining how to regulate crypto based on a 1940s case involving orange groves interpreting a law written in the 1930s," Sherman said. "We ought to have, if we could write it, a good crypto regulation law designed for this century."
"The problem is that all the money and power in this town is on one side," added Sherman. "There is no lobby for effective enforcement of our tax laws or enforcing our sanctions laws or dealing with drug dealing."
The House Agriculture Committee is meeting Wednesday afternoon as they work with lawmakers in the House Financial Services Committee on a market structure bill.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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