On April 9, 2025, Center for American Progress Senior Director of Financial Regulation Alexandra Thornton testified before the U.S. House Financial Services Committee’s Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence, at a hearing titled “American Innovation and the Future of Digital Assets Aligning the U.S. Securities Laws for the Digital Age.” The hearing focused on the cryptocurrency industry’s call for a special regulatory regime governing its digital assets and services, including crypto tokens, tokenized securities, nonfungible tokens, wallets, exchanges, and platforms.
Thornton’s testimony highlighted the risks at stake in crafting a separate regime for crypto assets. These risks include potential impacts on the stability of the U.S. financial system if rules do not adequately address the ongoing use of cryptocurrency for scams and financing of sex trafficking, terrorism, and other illicit purposes, as well as its use for money laundering. She also noted the reckless actions of the Trump administration and the Department of Government Efficiency in removing staff and reducing enforcement at key agencies responsible for ensuring financial stability and consumer protection—ultimately reducing the government’s ability to monitor or address any negative impacts of a new regulatory regime.
Thornton testified that the markets for crypto assets involve similar economic functions to those involved in markets for securities and other financial assets, and that the rules for markets in existing financial assets are what has made them efficient, fair, and of high integrity. She recommended that, in crafting rules for crypto assets, the committee start with the rules that apply to existing financial assets, which have been developed over decades in response to specific weaknesses and failures. Doing so, she said, would also prevent potential use of crypto assets to avoid the securities laws and gave examples of how that could occur.
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