A "Crypto Frenzy"? Today's Congressional Hearing Puts Bitcoin and DeFi in the Hot Seat

An interview with a congressman followed by a congressional hearing on crypto signal policymakers are moving to the next phase of talks about regulating crypto.

• Troubling comments in Congressman Bill Foster’s interview with Axios
• Upcoming committee hearing titled ominously “America on ‘FIRE:’ Will the Crypto Frenzy Lead to Financial Independence and Early Retirement or Financial Ruin?”

Foster has historically been a champion of the crypto market: He is a co-chairman of the Congressional Blockchain Caucus and was previously supportive of the future of crypto. However, in his recent Axios interview, his tone flipped, as he went as far as to suggest the need for a “cryptographic backdoor” to allow the court the ability to view or even reverse transactions. Is Foster’s new viewpoint indicative of a greater shift in policymakers’ attitude toward crypto regulation?

Today’s House Committee on Financial Services hearing with a particularly colorful title is yet another signal for an upcoming regulatory push in crypto. The hearing’s agenda includes a discussion of bad actors on decentralized currency exchanges, or DEX, including a reference to Mark Cuban’s recent loss of money in a DeFi “rug pull.” With an expert witness lineup, including Jim Cramer of “Mad Money,” Alexis Goldstein of the Open Markets Institute and Peter Van Valkenburgh of CoinCenter, there is quite a mixed set of viewpoints on the current state and future of crypto.

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