Transcripts For CSPAN2 Hearing On Cryptocurrency Oversight 2

by debbie stabenow of michigan. >> good morning, calling this hearing to order of the senate committee on agriculture and nutrition and pleased to see all of ours colleagues here for the important hearing and discussion. we're here today because rapidly increasing number of americans are investing in cryptocurrencies yet there's no federal oversight over what makes up the majority of this market and just as quickly as they've risen in population, we've seen the value drop and results of hard working americans that lost billions of dollars and dollars they used to support families, keep roofs over their head and save for hard earned retirement. there's been thehe value of some widely traded coins and built sents on the dollar. meanwhile 1.2 billion worth of crypto currency was stolen in hacks some lack trust. >> we need clear consist rules for the road that allowed good actors to innovate and grow while first and foremost keeping customers safe. oversight of one of the two nation regulators and it's our job to ensure we bring necessary protections to this marketplace. together with my partner senator boseman and with colleagues senator booker, thune, and hildebrand, there's the customer act and this gives the commodity futures, trading commission oversight. digital assets that act like commodities such as bitcoin and no federal oversight and hole in our financial system and il believe we must close it. our bipartisan will require they register with the cfg. our bill focuses on consumer protection and requires that theye segregate and safeguard assets and hold sufficient capital, and abide by rigorous cybersecuritycy standards. it will eliminate in this market and it will mandate that platforms speak truthfully and don't engage in misleading advertising it's the rights regulator. congress gave the agency oversight into the markets being a mainstay for all the producers during recent supply chain disruptions and elevated commode can i did prices. commodity prices and how the ctfc leaders and this week we receive add letter from former republican chairman expressing his support for the bipartisan bill. this bill gives the agency additional resources to get this job done right. , which is so important. other financial agencies in regulating digital assets and also important. comments about the fcc work together to make this market. or just just ast we get in putting together the document. we've had productive discussions with fcc staff about the bill as we appreciate and will continue. as president biden recognized, this is a big response ability with a lot at stake and will take all of us at the table working together and at our table today will be some of the brightest leaders in this space. and i look forward to hearing from each of you on how we can continue to bring transparency and actableability to this marketplace while still enabling the innovation that makes this technology so promises. the digital commodities consumer protection act and this bill i'm proud to cosponsor with the chairwoman as well as senators thune and booker will bring regulatory certainty to the growing digital commodity ecosystem. market integrity and consumer protection and fostering environment that encouraging innovation and our bill gives the ctc the authority to do just those things and currently it's subject to patch work at the state and federal level and market structure and consumer protection and it's without protection that technologies will continue in the economy for decades to go. there's time for regulatory certainty to the market and create a frame work making sense for domestic and international per spect and i have impeartive they work with industry andon consumer add colorado cats for laws and participants through a process. anything less hurts everyone. regulation by enforcement without any meaningful engagement with market partis pants is no way to police the industry. it's unfair to stake holders who are bringing in good faith and then punished because they've not been given the rule of the road. innovation and grow they'll wry and enforce rules and provide retail and fully understand the functions of the commodities they're buying and selling. i hope today's hearings provides a opportunity for coming down on the waying in on the most important features of the bill including constructive recommendation to improve the bill as we look forward a committee market. the right fit for expanded regulatory role for the commodities market and work together to protectot consumers and allow the ever growing technology to flourish. i want to thank chairwoman stabenow for the discussion hearing from our witnesses before i conclude, i would like to welcome one staffer to the committee and thank anothero staffer who will be leaving shortly. first i would like to welcome erica shabbot. she's the new majority staff director for chairwoman stabenow and no stranger to the senate. for the last 20 years, she served as senator, served senators and former chairman of the committee which we all know and are going to miss as he retires and we look forward to erica and look forward to service to the committee. secondly i would like to thank kirin is a native canton and spent the last 50 years working for the senate first senator robertson, the legislation that we're discussing today is largely the product and the committee has greatly benefited for the expertise and charm and i wish darren great success for many services and we're trying not to be bitter over the people that have hired him. >> thank you so much for recognizing erica. >> hee may think he's leaving ad i think we're not going to let him right in the middle of all this. really, oh my goodness. i do so appreciate our wonderful staff we've been fortunate on the committee in past, present with some of the smartest, hard working people that there are. we're very much a work in partnership and on this bill that's been handed and we really appreciate all that. our witness is chairman of the trading commission and certainly know either prior to prior to that was a valuable member of ourta staff on the agriculture committee and welcome, chairman and we recognize you for five minutes of testimony. >> thank you. chairwoman stabenow, boseman and member of the community, thank you for allowing me to be here fotoday. i believe that to be more true today and thanking the committee to address the needs for the dcppa and analyze what additional needs we'd have to support its implementation. digital asset commodity cash markets have retail participation and more on platform base custody arrangements outside of the traditional regulated banking sector. since i last testified over $1 trillion in market value was lost in conjunction with the failure of several large high profile firms in the shadows and inner seconded models and and they do wait on traditionalna financial markets and i publicly stated several times including to this committee, many digital assets constitute commodities and recognized by dcpa and the expertise and experience make @ right regulator for the digital asset commodity market. customer protections through the principles based market oversightt and disclosure regime aimed atd ening transparency integrity and security of actions. dealers and custodians with the future association and they acknowledge the key role that regulations like the future association playing safeguarding with markets and safety is often adapted oversight capability and in the wake of 2008 financial crisis and they've provided authority of over 95% of the swabs market and serving as cornerstone of robust regulatory regime for $350 trillion swaps market. returning to the danielal asset market with a lack of full visibility into the commodity asset market and the agency enforcement program had to lean primarily on tips and complaints from the public to identify fraud and manipulation. and primary innovation and they leverage the historic market regulator that is required in cftc regulated derivative market and compliant with core principles and the platforms establish and enforce rules minimizing and the integrity of transactions and intermediary and protecting customer funds. critically all digital commodity plat for the purposes must maintain adequate financial, operational, and managerial resources and and treatment of customer assets. in times of instability, uncertainty, or market mis-duct. thee dcc pa directly addresses the increased role of retail participants in the digital asset markets by directing the commission to adopt customer protection rules requiring digital commodity platforms to disclose to r customers material conflicts of interest and material risks of trading digital commodities. establishing duties to communicate in a fair and balanced manner and establishing standards for the platforms marketing and advertising. ththe resources contemplated by theth funding mechanism in a clr mandate for customer education and outreach to ensure the efforts reach all demographics that can reach swiftly in their regime as well. on september 21, 1922, nearly 100 years ago to the day, the grain futures act of 1922 was wsigned into law, which led to the near immediate establishment of the then cftc. with that legislative accomplishment, this committee and the congress swiftly responded to a policy need no matter what was on the heels of emerging risks of american consumers and becausee of then new financial markets and products.lo technological innovation and promise of development. theme rich history overseeing commodity markets and coupled with expertise and track record that rests on firm foundation offul and disciplined cop on the beach and stands ready to tackle the new risks and opportunities one century later. thank you and i look forward to answering your questions. >> thank you very much, mr. chairman. as you've indicated, i was talking about as i well. crypto currencies live g by every day americans right now. and some concern that had the cftc has not had a customer protection mandate and therefore may not have the tool that you need to protect these retail customers. could you respond to that? >> thank you, senator. i would say unequivocally the commodity exchange act and the rules that the commission from the law supports protection and without question. in thinking about the layers and there's several layers to the customer protection regime. you see it's important to identify at this sort of foundational level with more specific requirements for the registered and it's directly addressing cybersecurity and operational risks and this is directly about protecting customer funds and customer assets. conflicts of interest, something you noted in the issue area and core principle and entities that your bill contemplates with the trading platform and brokers, dealers, custodians and best interest t of the client and customer and no one else. we have core principles and the battle of the agency so that we can monitor for example the trading practices and making sure that the marketke is free from fraud and manipulation. prohibiting contracts being listed on trading platforms that are ready susceptible to manipulation. these are just a few of the nearly two dozen core principles that make up the regime and ultimately are manifested through the rule they describe. the second layer is how do we make sure that our regulated entities are complying with the rules and regulations. we do this with a series of inspections, examinations and investigations and we work in tandem withne our partner and te national futures association and another provision you include in the act to create self-regulatory regime to include the environmental market reare compliant with the law. we make sure that they have adequate proficiency and information they need to comply with the law. thing is enforcement and went have to ensure that individuals are held accountable for breaking the law. this is obviously one of the key components of our requirements as a civil lit gator. our agency strucked with funding over the past decade or so and i've looked at data points in the past ten fiscal years and average punt over $240 million per year. in that same period, this ten year period over average of $1.5 billion per year and six times plus return on investment for the american taxpayer in enforcement penalties. a few months ago i had the privilege of talking to the attorney general as he announced settlement with the trading advisers and oil markets. this was a agreement by the cftc and we need to ensure our energy markets are free of fraud and nah manipulation and that was brought to the cftc and it underpins trillions of dollars in contracts and student loans, mortgages, over ten years ago was bound to be on the benchmark itself and the financial contracts andfi was manipulated and trillions in dollars of fines against financial institutions across the globe and that was uncovered just downtown at the cftc and these are some examples of the work we do from the rule set, implementation and law and how we enforce it and the accountability and layered on top of that is all things you include inar the bill and it's extremely important is the bankruptcy protection and to your bill is extremely important and we prioritize customer funds and customer assets above all else. above creditors and security holders and this in total is a very robust, very comprehensive customer protection regime and worked in markets very well for decades and contemplate in your bill, will workdital commodity . >> one otheruestion. the ft. swapped with the full settlement rponseo the regulation digital assets in this new innovation. takeust a moment and add about how you would talk about workg. obviously twoery important agencies ftc and make regulators in the space and working together. and going back 40 years withs security futures and commodity futures.we we are constantly talking at the highest level in chair enforcement and we naturally have intersections between the markets and entitiesith the intermediate broker dealers and understands at a high level what the goal is and it's not about the ftc a sec and it's about theeg regulatory frame work, abt financial markets. it's about proteing customers and if we keep that goal in mind, think we'll be able to accomplish what we're tasked with. >> thank you very much. senator boseman. >> thank you, madame cha and i appreciate your questions concerning enforcement. that's one thing thatomes u in regards to the bill, this is cftc had the ability with enrcer and you aweredhat question very, very well explaining your role in the great job you're doing wit the resources that you he and punching the weight and still enabling protectin the customer while still enabling innovation soso again, thank you for generl a great response in that regard. another thing that comes up is user fs on derivatives, market activities, and i had the opportunit i've been on the subcommittee on appropriations thatas to do with thatnd chpions efforts that makeure that the cftc does not have the authorit to impose user fees on derivative mket activities. ... editor, in short the answer is yes. the bill is drafted prescriptivg lead t ensure the fee would only be assessed on the digital commodity platforms. and not on traditional derivative mket. >> rate. so it wouldake cgressional authorization toauat do that. in fac further do you believe it is clear that t only user fee precedent, as a result of is bill is it would takehe additional legislation to authorize user fee in the tradional derivative market of the cftc oversight? >> yes. >> very good. i also want to thank you and your staff. they haveone a very, very good job of providing technical assistance. not only with this bill but again the many years we have worked withh them. one of the suggestions we have heard from numerous industry stakeholders is about the definition of theti dealer. because our bill is intended to protect retail consumers, it is not our intent t cover proprietary trading firms invest on their own accounts. to be covered under the definition dealer. as currently written do you believe our legislation covers this kind of nonretail consumer faci marke activity? >> senator good question. i think i agree wh youn principle that we are trying to focus on retail customers. and in this case the principal trading firms of t proper traders as they are morean commonly known would be exempt from the dealer definition. that is consistent with the act and this comttee and the commission with respect to traditional. the carveout for proprietary traders? comedy you'l back my time i appreciate your answers a personal staffre you understand t is in answering questions. again thank y veryuch for. >> thank you verych much, i went over a few moments forount back to pray thank you so much fothat. i'll now tur to senatoror klobuchar and i believe senator ernst will be here shortlyhe will bee next. >> thank you very much. thank you as well senator boseman. chairman i think we've talked about this before i've appreciated you visiting my office as well. as y mention in your testimony, these are volatilee markets. i think we all saw that big time when we saw digital currencies were approaching their highest values and are spending the millions even more on these celebrity endorsements. i think we all thought the super wl ads, many first-time buyers were convinced to invest just in time for the market to crash. and there are people trading on these unregulated platforms. they may not even realize it. many of not even trade on platforms like this before. you talk about the undlying markets work and why it's in a position to oversee such a volatile market? i know you have done such things before. what recourseo consumers have who have been scammed or defrauded by crypto brokers? >> of two differentuestions. >> thanks senator. the unregulated as you point out, there unregulated. the regulation is limited to trsury in some state mey transmitter license but we do not have upmarket regulatory structure whh provides that transparency and t lensnto how the markets are operating. notwithstanding some obvious custody issues this technology is so unique and how you custody the actual underlying token the market structure is large the same. it's about shedding light on this marketplace that is otherwise in theld dark we apply the same principles we have for decades that were quite well. you talk about volatility that is imparts, we are seeing correlations between the digital aasset market and traditional equities market and bonds upmarket.rk bond market. i also think with the regulation will probably see reduced volatility. you will have more m participans and tighter spreads between individuals willg to buy and sell digital assets. i think it is implementing our core principles. implementing the rules defined successful, focusi on customer protection, focus on protecting customer money but implementing core principles around trading prtices. disrupti trading practices ensuring financial resources weekly platforms c do it they are intend to do. >> june ftc report indicat since 2021 of 575 million o the crypto product losses reported to the ftc were about bogus investment opportunities refer to some of the questions. many of the origited on social media platforms. like instagram and facebook. could you tal about the interaction with the platforms? what theirole is and what more could be done on that front? i really do not know what your answer is going to be on this. i noticed these numbers in my briefing. >> senator it's a very difficult area we do not have a lens into the trading platform. we are relying on customers as i stated in my statement. every casee that we brought 60 enforcement cases have been brought to us through complaints. we do not had that vision and th lens into the tradi platfo break what you said the bill wou give you the transparcy into it? >> it woul provi the authority to regulate markets. the volatility, the fud, the manipulation, ch of it wou prably g away we now have a regular, cop on the bea mood is would deter at activity by bad actors brick.ba >> tre's a lot of bad actor activity going o unsocial me too atforms as you know. this is not the only thing. but aop on the beat wld be unique compare to aot of ings going on. when considering the environmentalmpacts of the significant energy that's required to mind crypto currencies like bitcoin is a lot of questionsegarding suainability of crypto currencies. could you speak to the way this bill approaches the enviroental impacts of crypto currencies? thank you,? senator. requires two draft report than six-month report back tohis committee in the house ad committee. in consultation with other u.s. regulators most noticeably those of expertise in the energy space. i thin this is appropriate approach to this issue i would say in event occurred last night which is going toeduce energy consumption, step in the right direction but certainly not resolving the pblem. i think at its core the report will stand as basic starting point so that we can examine what the issues are.s where the energy issue are ocrring and what is the rrelation between the energy usage and the outcome the mining of the tokens. i think from their would lead to future policy discussions potentially disclosures and hopefully e incentives to move away from carbon intensive energy sources. >> thank you very much. have a lot of faith in you mr. chairman. i look forrd to working with center at stabenow, boseman and others on this. i did want to point out before we turn it back that we have with us that winning a picture of the congressional softball game. senator gillibrand who got four strikets. joni used to play on this team. and against all odds beat the press we will say was significantly younger as we had two grandmothers on our team. [laughter] the congressional team beat the press. we should be veryleasedith senator jill brands performance as aicture, she was inedible >> way to go. [laughter] >>that is terrific, thank you. senator ernst. >> wonderful, thank you very much charwoman and ranking member. today's hearing is extremely interesting. think we've probably got a lot of viewers out there that are probably ierested as well. chairman, thank you foreing here. we have heard all these concerns crto currency companies are being pushed out of the u.s. two other jurisdiions d to the lack of clarity. i wouldike you to wal through a little bit more how the bill works, would it address those concerns and address american competitiveness. but, why also should be want to promote the u.s. as a leader and an attractive jurisdiction for crypto currenc companies? what benefit does this brink to every american? even those who are not engagedre in crypto currency pair. >> thanks senator. for sure i have heard manyf the anecdote you've heard about companieneeding to move overseas because the regulatory unceainty. of the larger digital asset. it's certainly huge step forwa given the size of the market that you contemplate regulating. i think withoutegulatory certainty the innovators, entrepreneurs are going to haved more incentives to consider staying within theth u.s., raisg capitol here in starting their businesses here. it's a regulatory certainty. it's the law will c be clear and how they will impact and intersect with their business and not fear something unknown in the future. to yr second point, i view this i many respects like any technological disruption or occurred for decades and mention the futures act from what her two years ago in my opening statement. the different time when our farmers and ranchers were creating futures markets as technological innovation at the time. here we are at the dferent technological innovation. despite where the technology may go. i cannot predict the success or failure of this parade there is certainly demand pra there is certainly optimism. there is a vision for it to be implemented into our economy. when you have those core fundamentals being discussed and being outlined, i think it's important collectively as elected officials and regulators we do what we can to balance customer protections against innovation supporting the technology. >> if you could describe for us what would happen if we do not move on this in the next six months? if we do not move in the next year, what is the potential there? >> it's difficult to give an exact timeline t when things may shift within the marketplace. speak smart financial regulatory position, balancing the need to move cautiously to ensure we are embedding the principles that have word well forur capitol markets are derivatives markets foover 100 years. that means moving slowly, thoughtfully but moving and making sure were advancing the conversation giving entrepreneurs and innovators a sense of whatirection the country's going to take more policy perspective. we have to balance if you don't do something now are going to move overseas, i tak that with a grain of salt. but we have to have a conversation bird we have to engage. we have to come up with the frameworknd set a timeline and pathway so these innovators, these entrepreneursan do what they do best. we are on that path, this is certaiy a step in the right direction for it's a positive step if we contie to do that we will be able to preserve these entities, these companies, this entrepreneurs within the u.s. pray.y. >> fantastic i really appreciate it. went to echo eto cetera klobucr said,hank you, senator for leadg suc a greatan team. i have played women softball congressional softball for many years i was not able to make the game last night. we lost all of the years that i played. [laughter] and they won last night. so it is the common denominator there? anyway, thank you, great victy. thank you chairman. >> thank you so much. i'm goin to turn to the winning picture of last nights game. fix thank you madam charwoman. thank you to amy and tha you for jody. amy is our commentator she keeps the crowd it lively which is very important. dy has the best arm of the whole te. you better come back next year so we can keep our winning.rs chairman thank you so much yr leadership on this issue. thank you for being willing to work with this committee, for you being willingo work with me as well. this bill that we are looking at i think can be transformational. i think it is timely, i think it is urgent, i think it's necessary to create stability in a market that is growing. i talked to a lot of colleagues about crypto currency, block jane webb three is ts going to go away? it is here for good. it is part of the world economic community. and the question we have are we going to be part of the solution or are we not? innovars so businesses can have basic clarity on how to create their businesses. what level of oversight and accountability can be effective. how to create basic safety how to create consumer protection. and you being part of ts process has been absently essential to getting this bill written in getting it where it is today for the commiee. i am very optimistic. i would like for you to continue along with the line center earth started about why is this relevant now? this bill takes jurisdiction over the commodities part of crypto currencies. some crypto currencies are securities. digital assets can take many forms. scc has a regulatory responsibility, irs will have a regulatory responsibility. and so will thoughts and ideas on cybersecurity which i will address after this question. how does this bill fit into the broader framework? why is this bill getting done now so essential why and how does getting this bill done now allow us to build on it to do the rest of the regulatory framework to go and look at the banking committee and try to do stable coins go look at the banking committee to try to get c regulations for those athy digital assets talk about why this pie matters now pair.ma >> senator, tnk you for the question. you rightfully point out this is one piecef the puzzle bird we all have a role to play. 'll have our pces to contribute to the larger puzzle. i've been lucky to participate in the priipal working group, the oversight council, oversight and this is a big issue. you mentioned sble coins, this is predominately bking regulated issue. the secity tokens a thsands of security tokens. innovars are creating and we need to address for their issues around payments, custody, settlements for its onl different elements of this larger digital asset ecosystem their own little silo they are interconneed. this is an important bill you expressly outline for coin and commodity tokens.ar digital asset marketplace. it will push the conversation forward so we can continue to have policy around the different areas of the digital asset space, clarified and complete. as much as this will bring clarity, transparency and most importantly should point out customer protections to this particularti market which is significant, the other elements need to be completed to. we need to complete the larger puzzle. for going to see advancents in technology and innovation coupled with customer protection e market resilience, and ultimately financial stability depending on the size of the market, we need to have this patchwork all plugged together. >> thank you, mr. chairman. along the lines i mentioned on cyber, when i first became involved in this issue it was through my role on the intelligence committee. and so obviously, addressing things like cyb threats, privacy breaches other technology-based crime by foreign adversaries is top of mind for me. could youalk a little bit about you and your agencies are undertaking to be ready to address the types of threats and what needs to be done in the future to secure security in the commodities market? >> thanks editor. cybersecurity is top of mind at the agency or know we are financial market regator that systemically. as i mentioned in my earlier responses and in my statement we have core principles which drive our rules and regulation for the core principle around system safeguards directly relates to cybersecurity we have to build operational resilience within the institution for the regulated institution. it addresses the specifically prescriptive elite mention cybersecurity. we are at leveraging the tools, the expertise we happily understand were going to act up our game. from a markets perspective t cyber resilience and cyber issues are largely the same. but this a technology how do we hold these tokens the unique nature of the technolog and required deep thinking. build up the infrastructure of a cyber resilience system with touch point for bad actors to systemically support andda infrastructure projects thank you madam charwoman. >> thank you very much. senator turberville. >> thank you very much madam chair. thank you all for doing this. we need thi we need this bill. we need to regulate. we have got people out there investing in this do not have a clue what theyat are doing, including me. h is not a handful people in this om that really understand what we are talkingwh about. i've been two hours of seminars and read books. it is complicated. we need to help the american people, so thank youre-thank you all for doingng this. mr. chairman, thank you for being here. thank you for being accessie doing.d work you're some of your counterparts and some the other agencies could learn from you and your accessibily. i recently learned only 90% of crypto are executed outside of the united states. our country dominates equity and derivatives trading. why are we so w far behin in this? >> senator i was talking to senator ernst it' a great question. think we are moving at a good clip. we are certain not ling as fa as a others. i think we have to balance the need to preserve the financial the best in the world. but also making sure we are giving a clearense to the marketplace we are mking movi forward. there are several jurisdictions around the world which will naturally use this a an opportunity. they are either going to lower standards or lower the regulatory bar so they have more individuals or institutions coming into their jurisdiction. and that is fair. from a u.s. perspective given our size, our legal structure or the accotability through enforcement we can move at a clip that is safe, that's cautious, that is thoughtful but has to be deliberate. and i agree with you i get the sense we need to move forward this is a step in the right direction. we need to continue this and see it through the t t finish line o that we have that certainty for market participant so they canis start the business they are in that statistics which you named greater outside of the u.s. inside the u.s. can be flipped. what is the rulatory system going to look like? the we should or are taking here in the u.s. chairman powell is working very carefully and thoughtfully, not unlikehat i said earlier to contemplate the idea of what a digital dollar would look like. it is a balance. it does a lot of technical issues, monetary policy issues and infrastructure issues that have to be really worked through thoughtful and comprehensively before we can push that out in either a beta mode. i think we are movg at the right clip. it has got to be cautious but we are keeping an eye on the ball, engaging in move the convertion forward. >> iwe were to pass thiill tomorrow do you have assets to implement this? >> senator, the great elements and ovisions as a user fee which senator boseman pnted to you. this is a critical component to this bill. with a user fee that's exclusively focus on the digital platforms, we would be able to implement the bill. >> how is your relationship with the sec? >> historically and presently it's always been very positive way speak regularly and i know my staff does as well. we have toork together. we are building off of a relationship that is decades old and in order for us to serve customers, taxpayers and other participants we have to work together well and i think you're doing a good job on tt. >> i think one of t bigge protections in the areas going to be educaon. people reallyha underand what is going on because as i sai earlier a lot of us are behind. i'm starting to see digital atm machines in my states, what are your thoughts o that? >> senator, i do it to commend the alabama security commission they've been very forward thinking and very thoughtful about the state level for there are a lot of things emerging. i seen the same thing, atm machines that you are pointing out. this concernss me. ondi the one hand we have to let indivials make choices. but if itle collectively, as policymakers we have to make sure the individuals are informed. and they can make the most informedecisions about what they're doing with their capitol and how they are allocating a bird that is what concerns me h today. we do the best to put advisories and customer alerts on our website. but it is simply not enough. we have to leverage states and work with their individuals were really boots on the ground toun get individuals from a vfw, town halls, churches, schools to get information of access information soberly go to that atm they know what they're doing and can make the most informed decision. we are not there right now but this bill takes a step to accomplish that. >> this is not a phase, this is not going away. you are at theead of this. we hope we can help you i anyway. we are behind you one 100% we went to continue to be educated and market the right way. and regulatete it. that's going to be a big key so thank you madam chair. >> thank you, senator. i agree that's what w have the legislation. it is our job to make sure those things are in place. so senator smith and then senator fischer pray. >> thank you madam chair and ranking member want you to know i appreciate this bill to address the regulatory gap that we have heard particularly digital commodities. it is interesting, along with my colleagues under brown and senator warnock, i have the privilege of sitting on both this committee and the banking housing committee. in effect or gensler's testifying is one of the banking committee as we speak, which is where i'm going next. not on this topic specifically. this gives us a unique view and import not on the derivativeses market for digital asset commodities but also the market overall part of like to dive in a little bit on how this can work together. i appreciate what you are saying the comprehensive approach and also the effect with the scc together for many, many yrs. could you talk a little moreis detail about how you see, with this bill and the needs for regulation in other capacities around digital assets, how you e that working togethe coming together? >> senator it's a good question. i think as ias pointing out senator gillibrand it is still a huge ste in the right d directn. but the are missing components for eir other par of need to address are unstable coins,nd security law, payment and whatnot. it creates clarity around t commodity market in the definition of what a digital commodity is. by virtue of that i tnk the definition is draed quite well. very clearly it talks about digital form of personal propty. and it excludes dlars essentially digital dolrs something back by the.s. government. with that framework we then have a sense of what constitutes digital commodity. in the inverse my colleagues across town or financial regulators could use ts bill as a marker for how the rest of the pchwork or the puzzle may look. that is extremely helpful in the process of identifyinghat is a commodity, with the security with the stable coy and how everything should fit withi each different regulator that oversees the financial market. >> jt for an exale what would be t implications you have a one platform comg of digital assets being offered on that platform side-by-side. that are regulat under differt regimes. are the implications of that? is that something we should be thinking about? >> you probably dulyegistered platforms. in the cage of aecurity token and it would be ragged by both. depending on how the platform went into the list of contracts to be so i would within the commodity space and security space, we could potentially segregate the custodian services you are providing to the client. alternatively you can have a single account for a client that serves about the security side and the commodity side. i may sound complicated. for the efficiencies of technology we have security swaps, we have commodity swaps of security futures we have commodity futures. we have done this before. with dual registrants fm investment advisors to broker-dealers in future commissioned merchants. we are not reinventing the wheel per there is a level of complexity we can certainly figure out in partnership with the private sector. but of course with our sister agency to ensure we are doing it the most efficient way. but ultimately the most protective way for customer protection. >> your view while there may be some complexity to that, that is complexity that can be addressed through good coordination between the agencies. >> absolutely. >> as i understand that the bill takes the regulatory structure for commoditiesuc that exists ad applies it to digital assets that are being marketed to reach investors. could you talk about your agency does not work directly with retail investors. so could you talk about how that framework will apply to retail investors and how you can address how that works for retail investors? >> you are absolute right senator. the majority of our investors are customers. but we do have a fair amount of retail intermarket. we have national futures association which is an sro contemplated in this bill to make sure we have boots on the ground. where the core principles that i've mentioned a couple times. preventing contracts readily receptive susceptible. protecting customers me inter- information's getting to customers through disclosure. i would say just on the banking and this committed this distinction needs to be drawn and i've said this before, commodities have a very different disclosure regime requirement than a security do. security requirements require and good faith bridging up gaps between an issuer of a security and an investor. there is management, their centralized management. there is a financial statement, any of these things we see in reports from sec quarterly or annual or periodic does not exist on the commodity side. but we have to do is protect markets. make sure, fair, orderly and custers understand maet-based risk is they decid how to allocate capitol per. >> thank you very much thank you mada chair. >> thank you. senator fischer. >> thank you madam cir. missing parts the scc chairman has saide is working with the cftc on a formal memorandum of understanding, which would create one rulebook between a regulators for the regulation of digital assets when digital asset exchanges. so my question to you mr. chairman, how important is it that we have one notebook between all the regulators? et cetera think it's a great question. it's important have a mutual understanding between regulators especially to mket regulators. s and the sec are one to collectively regulate markets. regardless of the type of market or the financial asset there is an intersection between the two regulators. we wil have duly registered entities or individuals. it's important have a mutual understanding in the form of an mou or a handshake agreement at certain times because we need to know what and how were going to contemplate these different financial assets within the ntents of the law per. >> are you working on an mou now? >> currently bear not working on mou. i know chairman i talk frequently. we understand what may occur within the contextf the securities laws if entities were to be registered as security platforms for security ico's. if there is a situation where we need to work on a mou type document answering would be open to it and willing to make sure it works for our participants. >> have you reached out at this point to try to do that? does congress have to provide guidance or are you able to do that? text we are able to do that. if several mou is between the two agencies on enforcement matters or other matters of mutual interest. >> oka nebraska passedhe law those introduced by her newes congressman when he was in thend nebraska legislature. it allows a digital asset depository to be creed which allowed state-chartered banks in nebraska to offer services to customers who have those digital assets.ts nebraska is just the second state to pass that legislation. but, as we see these digital assets grow, questions wil continue to be raised about how they should be regulated. in the rule the state regulators play alongside the federal regulators, particularly as it relateto protecting and educating investors has senator turberville was referring to. can you discuss your views on that relationship between the state regulators and the cftc, please? >> thanks senator. oso is a former state regulator myself, having stateegulators is so important as a matter and i use this phrase was center tub or veil, boots on the ground. we in washington do not have the cacity or resources that comprehensive reach across the country. thread there it's in nebraska, california or any other state. they play a key role that partnerships are critical to make sure those individuals at the state regulator are touchiny individuals at the local level, the county level or the district level. we have a very close relationship through mou with nasa which is a national association of security is regulators. crypto is top of mind right now and it has been t for several years. i think the build is a very good job from the market perspective and prmpting states from registering the entities contemplates. what itoes do is pervert states authority over antitheft fraud which is a critical authority for states attorney general to have for bad actors at a local level. we will continue to use existing relationships we have a state regulators understand they play a critical role in making sure that information and disclosure in education is received by local investors. but there's also projections arou fraud preserved. >> to be contact with states on this, at this point in time stomer because has nebraska reached out to her the other states may be looking atassing similar laws have they contacted you at all on this ready kind of guidance? >> i've spoke with alabama stats security commissioner, we've knoweach of the for a number of years in my profeional capacity in his as well. he's also the president of this association t national association state security regulators. he may act as sort of the vce for the larger associationn each state member. i did speak at the annual fly and they had a few months ago i have not heard from nebska. huts are they welcome the opportunity t build a relationship and talk with them and learn what they're doing and support them with the resources and the expertisee have it. >> thank you sir, thank you madam chair. >> thank you very much. senator durbin. >> thank you madam chairman. thank you for coming here. representing the cit of chicago i'm familiar than some members. i think you do a great job. in fact, because of your good work we have been able to establish global leadership in many areas particularly when it comes to the mercaile exchange and the futureses market. people trust it. has a level of integrity that makes a difference. there is global competition but we seem to do pretty wellin that competition.n. the question is whether or not we can establish the se standard of integrity when it comes to this whole crypto world. i wasurprised in preparing for t this to learn that one in five americans have investe i or traded crypto currency. your testimony notes the fact significant number of these investors are lower income individuals who took quite a hit recently. it is no wonder the average american interested in this. after all, respected investmente advisors like matt damon, larry damo, have told that this is a good investment. everybody's doingt and everybody is winning. we know the reality, you pointe. out the reality that simply not the case would look at the record bird or the last year the value of the market has fallen below $1 trillion losin about 70% of its value. bitcoin alone has seen its value plummet between $20000 peak of 67000. in june celsius a crypto platform spended withdrawals in customers filed for bankruptcy. stable coin collapsed resulting in threaded billion-dollar loss across crypto markets. yeit was marketed as a stable coin. do not get me wrong, there is a risk and speculation. it applies to a lot of different circumstances. but lucky for us the crypto currencies have not been extricably tied to her banking system. to join dollar loss would have been felt in a different way. and now we have companies like fidelity saying they are going to include bitcoin crypto currency in retirement accounts. effluent to another meltdown like we did this last year with retirement accounts and life savings at stake it would have a much greater impact. i would say my concern is this part of blood talking about regulation. we have to have it. but i worry doing something but not doing enough tout up guardrails, stop signs on the crypto express. in this term, regulatory certainty i have run into that before as a term. if we do not provide regulatory certainty to this industry they will leave, though go to malta, el salvador, portugal or somewhere, really? t do you thinkhat's a possibility? >> it is but it's not a concern of mine. and senator i appreciate the point is what i sent to sender urns. we in the u.s have to balance our approach to regulation. we have done this very well for decades. we have to be deliberate, we have to be cautious, we have to be patient and instill the principles of regulatory foundations that have made our capitol market are derivative market including the board of trade, the best in the world. but i do think coupled with that cautn and deliberation we do need to move forward. we to engage we need to understand this isew technology disrupting financi markets. >> how much money does it need to regulate crypto currency? cetera think about a year ago as m november hearing before this committee it could'v been february apologize for not knowin specifically. i said $100 million for the use that number that's approximately the mber that we received over the past few years. since the financial crisis. what are fding level went prior to the financial cris to after the financial crisis. but in an effort to get a more specific numr, i hy staff work on this exercise specificly for number of months. we have one or $12 million over the first three years divided not eqlly. we would be weighted on the fron end of the deals. b for rulemaking, for training, for expertise. it's a b for outreach. >> what your current annual budget? >> hundred $20 million for a or talk about a substantial infusion to the user fee of 112 million per. >> hundred 12 men over the three years the first year about $40 million. >> really? >> we did calculations based on th ruleming's and some of the rerts that are due. in the engagement industry. >> i would like to tal to abo that i honestly believe if you are serious about regulation of industry we a one in five americans ha invested and had some rest. were now getti into retirement accounts. 401ks and the like the major brokers like fidelity and others e starting to include this in their plan. there's a lot more exposure and a lot more risk than just a year or two ago. >> editor i welcome the conversation. we did off the coffee with who's registered in doing a survey of markets. this is certainly not a hard number i would welcome an upward movement of that funding level. i did want to come back with the evidce instead of saying wondered million dollars which is what i did last time. time will tell i do not know how the market will consolidate or grow to this bill will be passed for s art may give an exact number i want to do my best to defend this number i'mure with the committee. >> this number is going to be generated from the crypto world in a usefee. >> exactly. >> thank you madam chair. >> thank you very mh. senator thune and then set h book or thank youoo cirman and ranking member for holding today's legislative hearing. i also want to thank both of you if your leadership on this legislation and on the responsible regulation of digital commodits. technology continues to form critical because proper tools to regulatehe grong marke. and to provide certaty when it comes to digital commodity platform. twyman original cosponsor the bill that we are condering-s today. it would crify regulatory uncertnties rroundg cryp cuencies give explicit authority to estlish rules and regulaons oversee digital commodities and establish guardrails for the market, which i think w all agree needs to happen. so i want to thank all the witnesses who are here today foa your input. i look forward to work with my colleagues on this committee to advance what i think is very important legislation. researcher but your testimony regulatory the highlight is played over the digital asset commodity market in recent years. could you walk us through don't have a lot o time, fairly quicklyhrough the experience d successes in regulating digitacommodies? >> thank you, senatore've been overseeing ts market through stly eorceme mechanisms is that 2014 utilizing our fraud mapulation authority we have brought over 60 enforcement ces some as large as $1.7 billion per to $100 billion, $40 billion, some of the largest incumbent crypto firms. since 2000 have enlisted futures contract relating to digital assets, bitcoin and other we are continuingo see even in th past few years it up or crypto firms purchasing regulated entities. the move is swift it's quick, it's forcing us to learn to up our game and limits our expertise. that puts us in a good position to implent thi billnd oversee the market. >> given just wha you shad in the recent enforcement actns and effor, wha is your response to concerns is not equipped to play that lead regulatory role for digital commodities? >> i don't think that statement is backed by facts. think if anyone took time to see a look at what we've done over the past few years goi back to 2014, i shared with jerome and stabenow some of our enforcement statistics at large. we are one of the toughest cops on the beat across the globe. we have expertise because of our experience with this technology. and i think with the user fee that is included within the bill, would be able to leverage thatgh authority, hire the right individuals, train individuals and really hit the ground running into what we need to do. >> let me ask again weekly. i know you probably address this issue already. word you said the united states ranks globall in terms of digital asset in blocking technology and if enacted wha effect with this legislation have on u.s. competitiveness in the spe? ick sator, natural because a size of our market the capitol avaible through venture capitol on fundraising andnd prate equity were always at the top. but it think there are other jurisdictions that have taken very aggressiv appach with technology hoping to capture the innovators within the jurisdiction. senator durbin pointed out that is n something i support moving r-rated tory system. we do it very well here in the u.s. it's moving cautiously and deliberately. but as i said wave to move forward. i do think this bill if passed would create t authority, give regulatory certainty and give incentives to innovators and entrepreneurto stay here in the u.s. and leverage the venture capitol the private equity and that legal infrastructure the enforceability of the law which really one of the most important things of all with global jurisdiction. and elevate our status within other countries regarding this technology break. >> one of the objectives of the bill and we all talk about this, how essential it is there be strong, robust consumer protections to protect customers and that digital marketplace from fraud manipulation. could you speak to how this legislation would help build upon the already robust customer protection enforcement action questioner. >> yes hundred a great question. it's really built on multiple layers. it is the core principles which is reporting record-keeping and conflicts of interest. it is cyber security system safeguard its prohibition of listing contracts it is manipulation. it's a baseless foundational vel that pushes us towards writing more prescriptive rules and the enforcing those rules through inspections, examination, an investigation ultimately someone breaks the law, keeping them accntable and making sure we are deterring future actions. it's a series, it's a layered customer protection regime. it is largely replicating what we do now and what is been very successful for decades. and i have no doubt this regime we deal in traditional treat derivatives could be applied as equally and as successfully digital assets.r >> thank you manager myime has expired, tha you. >> thank you very much. senator booker. >> metal chairwoman, ranking member and really grateful for your leadership in the l space. and i am honored to be a partner what i think is an important bill. i just want to say first and foremost it is good to see you, another bold jersey boy doing okay. so, justly really quickly i'm optimistic. not necessary about the coins on the commoditi but the technology underlying all of this opens up a whole new realm of possibility when it comes to watching. we have some real issues and concernsavue right now that i tk this bill addresses. we have seen his scams being perpetrated by outright fraudsters take advantage of eager investors we've seen risky products with inadequate disclosures not giving consumers chances to evaluate the assets they are purchasing wit their hard earned money. and we have seen advertisements whh some of my colleagues have already talked about promising guaranteed profits and almost seeming as they put forward. we do not have significant guardrails right now. we do not have transparency that we need right now. and we need better regulations. officially three things to do as congress. we can do nothing which would allow a lot of this to continue. some peopleant to create rules that basically make it illegal or impossible for everyday people to access his tokens, strangling ae market. we could undermine the strong security flaws and customers predictions in the financial sector, opening the floodgates that would enrich a select few, creating chaos and uncertainty for business and regulatory people alike. or we can do at this bill does is they can with the goal of allowing the space to thrive. for innovation to occur, but also give solid protections it would curb scams, fraud, increased transparency, accountability and increase the safety and the strength of our financial system. that is why this build to me is so utterly important. doing nothing is unacceptable. and so i just want you to address on the criticism i am hearing out there. specifically about cftc. some people say this is just going to be some light touch. in the crypto market without the real capacity to hold bad actors accountable and bring stability. chairman, what you have to say to those think with this legislation would bring a regulatory touch that would be to lights? and how you as chair will work with treatment gives litter and other commissioners to me sure the strong regular treyre in place? >> think senator pretty said thiso the chair when i could uneqvocably say our res are based on customer ptectio the data, someone took time during this narrative, if they took time t see what the cftc does. if they took time to examine how our rulesre strtured and what they are based on and the success of thearkets with senator durbin was pointing out, they would know we are one of the toughest cops on the beat in the world. and we are known for that. our enfoement statistics speakic for themselves returning six times what are budgeted every year for the pas ten years. the individuals within the agency -- these are sophiscatedontrac too. what swaps, futures, options and mention the case against the commodity trader, very, very sophisticated tring strategies manipulative trading strategies to create some net benefit between cash and futures market break. >> just for the sake of time, with the expert resources as well you would be able to even more significant enforcement as well. i want to shift to another criticism that i hear a lot. about the ergy consumption involved in crypto. even though some people are work iaway from pro of just want to touch on that real quick about obviously present bin has tried to address this. what would you do with this legislation to deal with this? >> is the first starting point this bill is very effective in requiring us to write a report. it requires us consult with other regulated leaders within the government especially those with expertise in physical energy market. tooth and nailnd examination of what the energy consumption is prone how it relates topt the tput and technology and come back to this committee in six months with with the recommendations are to disclose a regime or incentives for folks as you mentioned in directly proof of work to move to proof of steak or other two carbon emission. >> on to cover up quickly with the u.s. some part of the bill. been so grateful to the chairwoman for help to shape this, i'm concerned aut equity issues out there. disparities in wealth we have in this country that are persisting. women, african-americans participating in the world of digital assets which is concerning given t lack of regulation we are looking at. it also something that i think could help to create more opportunity of wealth and our nation. until this bill directs ofmo customers participating in the digital market and use that information to inform rulemaking. don't do, on that provision of the builder quickly for me? >> am extremely excited about it. i'm proud i carried the chief diversity officer a few mths ago. we have of the office of customer education with our public affairs office. we now have an infrastructure to leverage to have a wider outreach to communities, lower income committees, historicallyo marginalized communities and get boots on the ground to educate, and to inform to the outreach that we understand where these pockets of speculative investors are. associate with this technology. it's going to be a priority of my print certainly look forward to working with you. we are in a good place right now with actions of the m taken the past year. this builds authority coupled with the user fee should ringboard us to information out to consumers. >> you make jersey proud. you' not bon jovi bruce level but you are climbing t hil. i'm not wendell stay for the next panel i've got a sickle-cell work to do. i just am to say tnk you chairwoman f the next panel does not have a jersey authentici. there are some really great folks. >> thank you very iortant specifically on the provisions that are very important as we go forward to evaluate impact. thank you very much. senator bray. >> thank you madame chairman appreciate it very much. thankou for being here, appreciate it now you're going to be regulating a spot marke versus futures. can you telle what yr thoughts are in regard to that? is that gng to make a difference for you in a significant way? et cetera thank you for f the questi. e cash marketeally spot d market. this particularommodity market is unique as itelates to tritional, agriculture energy or middle commodity mkets. it is higy speculative and is result oriend. that is why think we have a very important role to play on the specific commodity market. >> how should this work? there wil be multiplee agencies now that have a role. what should that look like? so we do not end up with one of these bureaucratic mazes that nobody can figure out what is going on or who is responsible for what. which is not difficult for the providers but consumers too. what should look like in your opinion? et cetera need to look like what we do nontraditional financial markets. all dishes or sister market regulator. be a relatiohip of the banking regulars of duly registered entities as well. we've been forced to work together for the better part of 50 years with them they have access an intersection with both our markets for their duly restered as advisors for commodity pools or investment pools. the duly registered as broker-dealers. we have the framework and the foundation t do exactly what we've been doing for decades in the space. i have no doubt we will be able do it successfully. there is good will good faith if we can get to it. i think ultimately the reason think it's going to work well and the reason i think it has worked well is most clearly demonstrated in the fact u.s. has the strongest, deepest capitol markets and derivative market. we didn't do our job well from a regulatory perspective and matching these differences we would not have those statistics and that data to support it. >> are you interfaci now with those other agencies that will be involved in the regular overtype function question i there a blueprint to how that interface will work? and are there other bills with other committees of jurisction thatou areoordinating with this legislation? senator i mostly work -- of st contact with scc hidden chairman because of the relationship we have through o market. i work closely with all other federal regulators bot from a professionalevel to important to do but to theresident's rking group and the financial stability oversight council. we are working on seral projects focus on the digital assetrea. present biden has forced us to work on these issue specifically. we will continue to do it. do not have any set strucre necessaril now. there is a little bit of a vacuum in terms of what regulati might look like. we have seen several bills mosto notably unstable coin put some on cash marke but thisas i said is a step in the right direction. it needs to be moved as quickly as possible. one piece o a problem but as the puzzleecomes more clear and we sued the landscapes going to be, then we will be able to credibly move forward as regulators and lay out the plan of how were going to work together and how are going to this out. >> how does that package of legislation actually works? mr. behnam: pi who does that versus various committeesf jurisdtion. mr. behnam: i would say the bes plus print to look at now,he most recent is dodd-frank and >> title 7 was the derivatives hi and will multiple to the frank bill that affected several financial regulators, which we work currently w. >> not everybody is the fan of the cfpb. not sure. >> i appreciate that but it's been still a blueprint of how congressasses the law and multiple jurisdictions, mutt million agencies and - multiple agencies and work together to implement the l in effecve way with appropriate oversight on continual basis. >> you've not used the user efconcept before a we're familiar with that and the appropriations and we deal with that all the time and -- >> it' structurally difficult to early intervention program polimen and the user feeee structured in a way to work with appropriators to set the level can assess in terms of fees so we won't be able to assess these individually or independently. we have to work in coordination, which i think is consist with most user fees assessed right now. but overall senator, i i woulday it's ctically important. >> thank you. appreciate i thank you, madame chair. >> thank you very much. seeing no furth questions, we want to tnk you for joining us today and look forward to continuing to work with you. we'll take a minute to bring up our witnesses and our second panel and we're so pleased that all of you are with us and i i will indicatehat we will see a vote starting shortly, which will just mean you'll see us coming and going and it doesn't mean tt senator boseman doesn't like what you're saying or that i don't know what you're saying. we will be going back and forth and probably have other colleagues as well. i don't believe thas started yet. so welcome. apprecia all of you taking the time to be with us a i will of the staff and oversight reform committee of the house of representatives. we welcome you. sheila warren is the ceo of council for innovation and association and prior to joining cci, ms. warren was the world economic forum deputy global head of data and digital assets with a focus on making crypto industry more inclusive, equitable, sustainable. thank you for being with us. christine parker is vice president and deputy general council for coin base. the largest u.s. base crypto u currency exchange. miss parker joined coin base from reed smith, where she was a partner in the fintech practice group and before that practiced at sullivan and com well. she's no stranger to congress having worked with council to senator schummer and we'll to the hold that against you. it's pt of the nprofithat seeks to create equitable action for financial systems and joining her she was the coo at general council and legal equity and turning to senator boseman for our last introduction. >> thank you, madame chair. next bipartisan witness is dr. taert. the cef legal expertf tadel security and it's global legal complian surveillance and and world's leading market maker the commodities fure trading and vice chairman of the international organization of securities commission. during his ture, theftc advanced 41 final rules and 21 propals and 90% ofhem on n bipartisan basis. cf also set numerous records enforcementn more than 20 actions supporting liquidity and orderly trading. before joining the cftc, dr. tarbert was the asis taint secretary of pressurer for markets a served as supreme court clerk and white house council and special council to senate banking committee. thank you for joiningng us and thank you for all of the witnesses. >> welcome. >> thank you. chairman stabenow and ranking meers of the committ, tnk you for the opportuni to discuss the consumers protection act. applaud your collaboration and the rk of its staff and velopmt and pleased to support thi bipartisan bill, which would provide mh needed regulatory oversight ofhe digital commodities market. these types of problems pose significan risks to retail investors and some cases invest their life savings into crypto and reasonably assume they are protected from thees threats by the routine federal regulatns that apply to otherinancial assets. they're not enforcing the security guards guardrail to protec retail investors and the queson of whether crypto ast is a security or commodity is a fact and sushes determinion left to the cou. i expect many crypto assets to deemed security and subject to sec rules. however at least one cpto asset, bitcoin is a commodity and aning that the securities laws will not apply. 40% of the crypto market by vome and lack a regulatory regime for it. further all though some courts applied to declare crypto assets as secities, and case laws in its infanc courts deem some or most crypto assets commodities, federal regulators hand strung in tir abilitto regulate them. unr their sushes, the digital commody consumer ptection act provides a needed and regulatory fra work f de-centralized digital commodities and d cftcnd needed authority.ut they'd appropriately apply to crypto assets deeming security for the oversight sec. second, the dcpca wou imement consumer protections for consumer commodities including prohibition from assets and ready to 345 niplation and engaging in grade le deceptive and manipulative practices and trading for client ading and more. these apply to the securities markets. further, we are seeing investors and securities ready access to a variety of written dclosur, vestors in cryo commodities are large limited to scouring projectsnd inconsist and unverifiable infmation. the dcc pa would require crypto commodity plat for the purposes and plain language iormati abt listed assets to stomers. updating t bankruptcy code to better platform clients. third, the dcc pa would require the cftc address the effects of ypto on clima change and financia inclusion. th bill would require theftc with the widely traded cpto commoditiesnd investments and incentivize ten issuers and migrant blockue chains and minos to cleaner electricity and migrate the capitol following the impacts of investments and the bill wouldequire ftc t sty the participation of historicly underserved communities cpto and use the infortion t inform the protection regulation thank you and i'm happy to swer any qstions. >>hank you so mu. we'll now hear from ms. warren. welce. >> thank you. chairman stabenow and ranking members of the committee. thankou for the opportunity to testify today on both the tremendous benefits and opportunities with the adoption of digital asset of the united states. i'm grateful for the engagement and leadership shown by so many on this committee. there's a pressing need for regulatory clarity and create jobs and improve financial inclusions and enhance privacy and security. over the past two decades, my time as an attorney, entrepreneur, product builder and ngo executive has focused on intersection of technology, law, diversity inclusion, civil rights and web three. the frame work is crucial and the dcc pa is a pivotal step in achieving the clarity and oversight greatly needed and i applaud this community for the focus.san work on this the remittances with high seas of 6% according to the world bank by contrast, crypto service priders can process remittance payments by 1 to 3% and significant cost savings to consumers and are crypto is unprecedented opportunity to increase financial equity. a federal reser study found that nearly 24% of americans have neither access to a bank account and and ownership-based model is key to providing meaningful opportunities to the historic populations. in the case of foreign aid, within days of the invasion of ukraine, crypto was a catalyst in bridge to crucial financial support. the european union came to a landmark political agreement on thend package and united kingdom set out to make it a global crypto asset hub and south korea is set to be in shape by the first half of 2023. tool to achieve the foreign policy goals and bond. relatedly, forward looking regulation is paramount to national secury. it'll be critical to thoroughly study things and price including formal policymaking and it will also be equally important to the ftc after the regulatory partner to the ftc that the question what is a security is definitively answered tohe appropriate legislative process. i was particularly excited to see the report on underserved communities and energy reports included in this proposal. in believe the actual fact that these reports surface will show that cryptos show these tools and the critical policy goals in the paces. thank you for the opportunity to discuss these important questions and look forward to answering your questions. >> thank you very much. mazara parker, welcome. >> thank you. good morning chairman stabeno chairman boseman and ranki members of thee community. thank you foror allowin me to testify for the need for comprehensive need forhe regimef ypto. i'm the vice president and deputy council f coinase. i was a lawyer in private practice where i foced on commoditities, drierves and digital assets andpend years advising clien on regulatories and obstructing cerumenly indications associad with title 7 as well as commodities exchange act. also have the pleasure of working for senate majority leader chuckchumer for five ars prior to joining a pvate practice. i belie we' a a cross roa when it comes to crypto. the u.s. government can either create a regulatory frame wk that embrace the transformive needs for crypto and protects consumers or can iose an unworkable regulatory frame wk that will push thnological invasion and the job -- innovation of the jobs of theto future oversees, a trend we are already seeing. i would caution members tt are skepticaabout crypto that we applaud chairwoman stabenow and introding a bill we believe will create a robust frame work fo the effective digital assets and also want to thank the staff and committee for their hard work and foc 234olvinghe technological challenges presend in grafting the legislatn. the currt regulory environment for crypto is complex and disjointed athe fedel level, the government reliedn law that have not kept up with the thnolog at the state level, laws and relations for dital assets ha emerged in recent years tewith little consistency across jusdictions. the bill amends the act for frame work and spot market f digitalsset commodities and would ll an exiing gap with overght and lead to more consistonsumer protection across the country. the regulated exchange a hofully a few months away from operating our own ctc regulated fures commission mercht. the bill defines commodities - digital commodies to include and n to lim but it doesn't cut the knot as to wha is or is not ait digital asset security. that is onef the fundamental issues that remains unsolved today. rrency, commody, entirety d at coin base, we employ rigorous process to determine if an asset is leg, compliant, and secure befee listen on our platform. th key is to whether or not it as characteristics that wld make it a security under.s. securities law and we've appred and currentlyist 2019 an we're confident they're not secuties. hover this process is notes scaleable across the industry and forces coi base t reject many assets. we believe t bill coulde strengthened by further defining commodities to ensure asset for the dinition and not by enforcement through the fcc. we urge congress to draw these distinct lines between the different types ofigital as assets a the clarity will offer new iovations and more down the line. we understand the billill continue to elve particularly at the full senate considering the opportunities and i look forward to ansring your questions. >> thank you very much. the consumer protection actct achieves three essential goals and number one, addresses a critical line in the jurisdiction and i was cftc chair we brought nearly 20 crypto related enforcement cases to protect market integrity. we couldn't write any res to stop bad behavior before it happened. the cftc just doesn't havehat authority.p p a number of states attempted to fill the gap. but the patch work of differing regulatory regimes is simply ill suited for a national market. this bill addresses that glaring regulatory gap. it would grant the cftc authority to directly regulate digital commodities trading and that would help the markets grow responsibly and have the same kinds of regulatory guardrails that made other financial lines the market of the world. we at citadel securities are proud of 20-year track record of reducing loss, increasing transparen, improving resilience and markets here and around the world. the road inflates for digital commodities and going up on the field. it will bring real stability to the market and replace the bucket shops and boiler rooms. number two, the bill promotes u.s. leadership in digital asset markets. wi help of americans to protect the americans and focusing specifically on abusive trading practices and lack of transparency and conflict of inrest and in addition all platforms subject to financial and systems safeguard requirements to improve their resilience ande certification of responsiblemerican innovation. number three, this bill is designed to sta the test of time. start the obvious. it's a b biptisanill and history teaes that laws with both bipart son support are are mikely to weather political chge. another enduri feature is the ause ofrinciple regulationnd allow reasonabl and flexible complice with core princles and also avoid the loopholes that inevitably come when regulations are too detailed to keep up with markets uergoin rapid cnge. the bill wou supplemen the ne authority with a self-regulatory fir line of defense. finally the bill recognize the importan contributions of regulators other than the cftc and tied congress' hands on the othe issues that we raise for the u.s. financial system. alin all, this bill is a huge step forward. at the same time at least three ways the bill could be fine tuned. first, the committeehould refine the dinitions of digitacommody brors and dealers. this isith sweeping firms not considered brokergi dears and other well regulated markets. second, the bill should have safeguards to protect those who trade dital commodities that have been self-certified or otheise approved but then are latereclassified as securities. thir i recogni principles ne flushing out in the past d cftc proactively wrote rules and provided guidance and congre should be make its intent crystallear that the bi doesn't grant a license for reactive rule making by enforcement. let me end by saying 2022 looks a lot like 1922. 100 years ago this very committee helped to create the green future act passed in september of 1922, it established the green futures commission an early forerunner of cftc and the problem was strikingly similar to one now. futures in wheat, corn, and other grains emerged as truly national financial market. the bill was subject to a patch work of conflicting state laws that failedo protect americans. e answer then is the answer now a robust and flexible frame work providing coherence for everyone and i applaud this staff for advancing this critically imptant and initiative. >> thank youou very much. miss dickson, welcome. >> good morning, chairwoman stabenow and ranking members of the committee. thank for inviting me to testify today and i so honored to be here and i look forward to discussing the digital commodities consumers ptection act. i'm danelle dicksonnd i'm the ceo and executive director of the stellar foundation. before speak alabama the opportunities presented by the dcc pa, i'd like to share a bit more about the sellar development foundation and executivee network. what's important is like the real worldld solution built with this technology. the stellar devopment foundation or sdf was developed along the network in 2014 with the mission of creating equitable access to the global financial system by using technology bial larra. the network is open permissionless, de-centralized ledger or block chain ledger and optimized for payments and asset issuance and particularly useful for payments. today rather than talking about the things that we read about in theda press with respect to trading or speculation, i'd like to highlight a payme service that was built on stellar launched in the dead of the crypto winter this summer. in june, money gram, circle, and a growing number of digital wall lets launch add first of its kind globalit service that enabd anyone to allowing cash funding and payout in different parts of the world. money gram providing a global network of cash in and cash out vocations.gr this is true interoperability with theet existing financial system. in practical terms what this means is that an immigrant farm worker in michigan or kansas or california or anywhe in the world to earn cash for her family with experiencingg uncertain wait times and go to the money graham and typically for market or pharmacy and the cash from srtti to finish and convert at $100 or virtual dollars in usdc. at's deposit directly into her digital wallet. on the other side of the transaion, her panters could visit their local money graham m location and cash out of own usdc from their ding cal wallet she sent to them into loc fia currency when they need that. this is available right now. it's being used right now. this novel service gives neected, unbanked, derbanked, and cash reliant popution a phway to enter the digital economy. so let me turn now to the legislation. the dcc pa goes a lon way towards allowing the kind of regulary and going down the li for the spot market regulator and history of vetting andpprovi new produ is well suid for this type of respsibility. we also applied theocus and con sums related to digital commodit and encouraging to see this bill set out a process for listing stable coins and that it is consist with the pwgeport with at the sa time stable coins not being included as securities. we agree with that and they're necessary for payments. ... streedesperately needs a definition. it's t perfect vehicle fort. not all digital assets are created equal. as an example the challenges we face defing digital assets, a reference to minnesota and i will state fairs my written testimony. required tickets in order to experience the full fair t periences. much less you need to engage with particular networks and rvices. we need a practical, principled -based frameworkhat focuses on accept functionality. that is an appropriate clear policy and regatory framework, digital asset and block chain have great potential to improve access to financial services for millions o people. i beeve the dcpa is a consequential step towards creating this vision. thank you again for the opportunity to testify today. >> thank you very much great very much appreciate all of these suggestions aut further ways that we can improve this legislation. that so thank you very much. let me start with mr. phillips. one of the important goals of the legislation is to make sure we are bringing the trading of digital assets under federal oversight. that we bring all of it. and so we know securities and exchange can regulate securities. we want them to do that, we want them to do their work. but not all digital assets are security. so what are the risks for consumers if a congress and does not have legislation given the cftc oversight over digit commoditie >> thithankou,enator. they are so many rks to nsumer that we have seen over the past coupl of years. consumers have lost millions, hundreds ofillions, billions of dollars through scams, through rug poles,hrough hacks. this bill would enable the cftc to wte approiate rules to protect consums against all those things. for example the access to exchange dataees wl allow to find market manipulation using technology and then force the anti- fud and manipulation authority, i would require platforms to provide appropriate disclosus. it would allow the cftc to write enforceable rules around cybersecurityrotectns for the various platforms this bill would do so much to protect customers. and i appreciate the fact all these provisions are in the bill. >> thank you very much. ms. warned, we know a large number of individuals, as you have indicated including those historically underserved communities, are using an trading cryptoight h now. and our bill of course it directs to study the rial and ethnic and traders. in using data to educate, to really inform around outreach and education and rulemaking efforts actually. drawing on your experience in the industry and in the nonprofit sector, do you have recommendations for the cftc about how to do outreach so that we couldn't really reach all these customers?ha >> us only do senator and thank you for the question. i think it's critically important to beginim with community need for the cofounder of something a project called the crypto research and design lab which uses to center these communities that have historically been underserved or even fully excluded by former financial and technical assistance. to articulate what exactly their needs are and how crypto can be a tool of support and provide the financial access they so desperately nee. i think it is critical ts kind of analysis inform everything from disclosure regimes which need to be in plain language, very car so consumers can makee the risk assessments that they are best qualified to make in deteining how crypto can best serve them and their families. and so i think engaging in factual analysis is incredibly important.d it is of paramount importance but i think in addition we need to have education that begins focusing on not just crypto itself but on fundamental baseline digital literacy. that is something i think needs to be seen and spread throughout her community college system. our post secondary in general. but even secondary schools to ensure americans are prepared for the global digital economy regardless of their background. regardless of the opportunities fromeing from wealthier families or higher income pulati. >> thank you very f much. mrs. dixon, colleagues on the house of financial services committee are working on a bill to regulate stable as we know. how would that legislation interact with our bill given the authority to regulate digital commodities? looks thank you, senator. it is such a great opportunity to be able to he these bills work together. having a clear definition of what is truly a stable coy is uly important. where to send this bill a process for listing stable coin. it's really important because a lot of what we read about in the early days of the summer focused on things that were labeled stable coins but were not one -- one back to you. they did not have audit requirements for did not have the transparency we think is important not just for american consumers but also for businesses whomp want to leveraj the stab coins, cementing the money gram example. so creating that very clear definition of what is stable coin. holding those assets in a secure depository account. make sure that if you do have a run on the bank there's not on the a problem for the constituents w choose to get their money out. these are all really come important pieces we think need to be addressed. we see not just the bill in the house the proposal but together with stable coins and dividing stable points. we continue to have regulations or innovation on stable coin. >> thank you. thank you very much five other questis on when to stop at this point. i'm going to g and vote and leav the cmitteen the capable hands of senator boman. don't mess it up. [laughter] >> i am getting a ltle sponsility. senator gilbrandould you like to g t now? this is our star pitcher we will defer. >> yes and then all the vote. >> want to talk a little bit this is an area where we could improve this bill. right now for those who are focused on this issue, decentralized finance has enormous opportunity to improve innovation, to work collectively toward greater more financial inclusivity as many of you have testified about. fewer intermediaries, more opportunities for people of all income levels to engage in the financial system.th and while this bill does include decentralized finance on its regulatory framework, do not know it's been treated in the way it wouldeed to be treated to actually continue to participate. so want to talk a little bit more specifically for the benefit oft the staff who are working on this bill. what you would suggest laying out in terms ofrotocol that would apply m and map finance better than the definitions rightt now that seem to be overy broad andnd encompassing too may things that do not really apply. >> thank you, senator. i agree i think theefinition proposed now is a bit unworkable and how it actually operates. i think it's important to note i have been in the states full-time now for almost six years. didn't exist when i entered the state is a concept. it w bran,randy, newport re reay at a poi to the cuing ed of iovatio is reflected in what we are seeing inhis space spred the market is not even had time to decide which model itakes sense let one sete int paramers and models that are csisten across differentinds o offers seng in services here. i echo your sentint this is critical important edge inur system for is goingo provide i believever te incasing advantages to those who simply cannotccess other fms of financial seices bause ty have bee again historilly unrserveas report named. we do so aptly named. thinkt's also really important is to ensure it remainsn the united stas. and the concern i have which i've shared with the previously is that we are going t see off shoring of this innovation space in a way other colleagues on the panel have noted is going to not embed the principles of these frameworks tt are so critical to ensure americans are receiving e adeate attention theyeed andeserve. let one the globa citenry. a general matter weo recommend is t spacet requires a lot study. requires a lot off focus to wha is hpening, what is coming, the trajectory here. al a bit more time before we t try to box it into something that may windp cutting off avenues that could benefit tremendous groups of people. >> could you just expla a little more detail? a lot of people do not understand the difference. if you have a protocol ever takes custody of assets. no need to make sure they are co- mingled like a bank or something in traditional finance spaces. differencexplain the and why these definitions unfortunately may include and therefore exclude entirely could you explain the difference to the committee for in the staff so they understand why it needsr a separate study for this part and to make sure it i not being excled so, the way the fight works it's immediate pass through. a. o. connection between two parties and engaging in a transacti. without a centraliz intermediary in the middle ofac that. it's software and not an entity. it's a group oft people managig an organization. quickset is exactly right.t it is code actually governing the exchange. that leads to a lot of exciting innotion that islso challenging t figureut how you create a frawork around them. every thing tt has come before we tald about 19202 this about opposite from that kind of models yououldt get. eity in then middle ofhis that's directing the flow t of funds and pointing things where they ought to go. it's essentially conducting that same service. conducting the same opportuty. it does behooves very carelly t precedent is being setith tnk about a ce base serving a primary function, help otleyo think about a regulation tt retns the innovation edge ensus a pncipalbased framork is grounded in the u.s. historical approa. his underlying all of that. >> thank you. mr. philli, i want to thank you as well f youro leadership and the work you have done with this comttee and withy sta on writi portions of this legislation. in terms of ideas a thoughtfulness. i want to talk a little bit about the issue people have concerns about, about energy use and the way this bill will create a study and a protocol to create betr disclosure pe perhaps. or other recommendations of the participts can make informed choice. can yo talk a little bit abo how you do that? which oth regulatorygencies ask for information from and explain h we are doing that and how ultimately i will help long-term? >> absolutely senator, tha yo you. this bil would require the cftc to reqre a sdy along with other gulato examing the energy impacts of a variety of digital asset cmodities. in addition to studyg andto creating recommendations, congress and how to reducehis engy impacts it would also require the cftc to lift t energy inspect of a variety of different asset commodities. sohat investors can see those disclosuresnd make investing decisions based on what they see. if there is a token that has an extremel high energympacts compared toem something else that is a similar type of token, it is rsonable to bieve investorwould move to the lower energy intenve assets, incentivizing theigh energy ones to reduc their energy impact by moving to aifferent block chain or doing something else. reducing the overall impact of energy in the crypt market overall. asor other regulors the cft should speak with in doing t th, definitelyoes s have oversight of the nation's energy market. th securities and exchange commission which i expect -- i would note them to energy o impacts of those digital asset securities. and in addition potenally bank regulators who oversee other parts of the digital asset markets. >> thank you. thank you, mr. chairman. i have more questions if you want me too filibuster. but if have questions, your turn. >> if you want to ask another question you're welcome. g as long as i do not get mad at you over on the floor but. >> one more, i want to talk a little bit about what happened after the days of russia's invasion of ukraine. people were concerned crypto currcy would be used by russian oligarchs to evadeld sanctions. but that actually is not the store we heard. it wind it up being a very important example of how this industry and technology can be a solution for families countries, unstableovernments that needesourc to g to them quickly. that made se excellent points about remittances and help her and that isor world markets. i care very deeply to aess for capitol for communities that are disadvantaged and are unbent or under banked. i li you to augment the testimony and talk about the positive stories about how thi industry and how thisechnology can transrm who has access to capitol urgent times of nee i think you can use the ukraine exampl is one. but whatever ones you want ton add to the record. >> i think that ishe most acute. there's really no queion i do not mean to sound dramatic there is no question t be a very different situation in that conflict if the crypto community had not mobilized in response to specific requests from the ukrainian government, allhat to the presidentffice asking for crypto donatn to bridge as aatalys of the international community could provi the aid that has resulted in where we are i the abilityf the ukrainian people to snd u to thisrutal invasio for there's question crypto was a bridge, it was catalyst and essential to give the international commite timeo provide capitol. we kno because we can see where that money went, who it was given tolso what it is used for. we know based on the accounts th come from ukrainian government this was medical suppli. is was arms, it's her things are critically vitalmportant crucial times. in addition weeem cpto be a critical tl for activists. thos who are worki in some cases with the u.s. government to actually provide money whher it's money to get them g out of the country they are in crisis because of polital happeningsround them. we've also seenomen in times trouble in afghanistan is probab reall good example where when the talib cen they were looking to seize appropriate funds the communities in crypto parcular womereason crypt in a wayo shield assets from tt seizure which is critil and provide the ability for people in that couny too resist they a toward authotarian rege pushed upon them. these are examples i the car located in other countries but ey are soo critical. they underlie in my opinion why 's so important to youroint in times of crisi the reality is that here in the united states we cerinly have been in crisiss well. these may not be the examples a popular as noted ty are quieter examples may b or not as in terms of the opposition. nevertheless our community's here that also been unable tos get access to financi services that are tryg to crypto for the numbers speak for emselves. so wheth or not you or a in anre acute situaon or crisis, you find preserving the opportunities that ts particular innovation represents is of criticalmportance. d again underlie also of crital importance but. >> wt to thank the entire pane apeciate your testimony. information given t thisanel about i the urgency thank you so much for a. >> tnk you. mr. phillips, we appreciate the good work that you and your organization are doing and trying to educate the public or trying to accomplish here. one of things were hearing from the other consumer advocacyhi groups as somehow this would erode the sec authority tout police the crypto market and is still prepared to ensure retail consumers are protected. would you agree our bill specifically defers to the sec when it comes to those digital assets deemed to securities and only looks to provide that regutory authority over digital commodities? the other thing we areearing along with that is that sehow they would be underfund. they would not be able to do this you might reitera the importance of user fees and tt would be fine. so again, like i sai those are two of t majorhings we are hearing, if you would address that it would be helpful. >> yes thankou, senor. this bill, as i readt specifically defers ahority over crypto securities to the securiti and exchange commissionco and rerves for the cftc reserves those crypto commodities. my understanding is that since introduction there been one or two places where it has been identified theuthority may be in hingednd in my written testimony and make recommendationto addsses that. i want cftc authorities over mmodits. i also think the cftc w'his bill and the regulatory capacit and expertise to be able to address these markets. the cftc is an excellentca regulator. the comssioners and the chairman are excellent regulators. and i think they have the best interestf customers -- crypto custers in mind. as for t underfunding, i think all of our regulators need additionalesourc but i encourage congress if it enacts this bill to also increase the cftc's budget. i do think the user fees the f would be able to collect would rhaps make it easier for ngress to increase t budget to appoint whe the cftc can properly regulate this industry. on the first panele heard chairman mention he expec the cftc would need an increase of 112 a million dollars over three years. th sounds like excellent bang for the buck to get these assets appropriely regulated. cooks very good, thank you ms. waed, is going to ask you a question about d i appreciate the discussion you d sator gillibrand h and certainly that is something we are very concerned with getting it right. so we appreciate that ms. parker, your testimony discusses the curre regulatory under which crypto currency exchange operates. plse spe about the various state and federal regulators of coin base where there might be gaps partilarly related to consumer protection measus. an why it makes sense to provide the cftc with exclusive mandatory regulation of digital commoditieset forth in the bill? >> thanks editor. that is a great question. i will say there are many state and federal regulators that regulate coin base. one of our big challenges is particular with respect to consumer protection is that it generally falls to the banking regulators under the money transfer licenses to carry that mandate. and so it's not so much we are unregulated or there are gaps in regulation it is not consistent across states. in particular i'd point to our disclosure requirements. each state has its ownet of disclosure requirements for consumers. not all are tailored to digital assets. this bill solves a critical gap in the sense it would bring in a unitary federal regulator consistent provide a f consistet set of consumer protection requirements that would apply equally to all consumers and uld do soso in a way that tailored to the nature of the market and theth assets. the ftc has been active in this case for a number of years. this regulation fills the gap with respect to commodity transaction in the spot market. we wouldla certainly welcome tht role in the space. >> thank you. doctor your testimony raises an important point how this committee may provide further certain market participants who comply with the bills registration requirements with quthe digital commodity. t somehow subsequently run into an threat to reclassify. what appears to be a digital commodity as security. how can we address that problem? >> thank you so much senator for your leadership on this important issue. i think that is really the key here. many established market participants and other securities are looking for that clarity and coherence. and as you say what are the issues could be something that is reclassified after the fact we would wanthe kind of certainty that comes through safe harbor or something bring the time in which we are trading those instruments to be able to later on not face civil litigation, other kind of enforcement action for change by the regulator itself. >> very good. rex ms. dixon, again another thing. this is been discussed already but i think it is important because it does come up. is my understanding the energy consumption required for mechanism transaction validations can be significant. which is why i'm glad our legislation. what is your view on measuring energy use with various consents of mechanisms and crypto space? >> think it's much for the senator boseman. think of your leadership and that of your staff on this. what the bill presuppose about the study that needs to be done with respect to the environmental impact of a the different consensus mechanisms is so important. it is something we do and lots d of other industries to be able to figure out the benefits eatst of the industries reached different challenges bring to the united states. all consensus mechanisms are not alike.ca but importantly what we can do were helpful to study does is create a framework for how to measure the carbon output. and figure out what we needo do as an industry to further improve it. you just saw it last i think those 2:30 4:00 a.m. eastern time were move from proof of rk to prove that was already a momentous shift in terms of demonstrating the increase sustainability for that network by moving. again no all consensus are created equally. but if you think about a framework which we have done by the way w have engaged to create that kind of framework with respect to the piece of the transaction could be viewed when you look at theustainability as a whole. we welcome that kind of framework. we think the industry needs that to create consistency and to understand really truly the value and also the potential harm in what we can do to improve on it. >> thank you very much, madam chair. >> will thank you veryy much senator boozman. thank you so much to all of you. we appreciate your testimony and look forward to continuing to work with you. also appreciate so much chairman and his leadership at the cftc which is going to be so critical moving forward. we sought last year, a lot o volatility in the marketplace.ss we have a bill that's going to address that to make digital commodities safer for americans to use, and to trade. and again, investing and supporting the innovation and the opportunities ass well. i think this is a really important opportunity for us to move forward. i'm hoping our colleagues will join us on this biparsan bill so we can get the cftc to work. and again thank you for the record will be remain open for five business days for members to submit additional questions or statements.io wiout further comment, the meeting is adjourned. thank you. [background noises] [background noises] [background noises] >> coming up next, economists and academics testified on the role of corporations and driving up inflation. then a hearing focusing on recommendations from independent review commission of the prevention of sexual assault in the military. later, former irs commissioner talks about the benefits and improvement solutions to the and earned income tax credits. >> c-span is your unfiltered view of governmt. funded by these television companies and more including charter communication. >> broadband is a force for empowerment. that is why chaer has invted billions building infrastructure, upgrading technology, empowering opportunity in communities big and small. charter is connecting us. >> charter communication support c-span as a public service along with these other television providers. giving you a front row seat to decracy. >> the generous six committee returns wednesday fourth and ninth hearing ahead of the release the written report. expected by the end of year. you can watch the hearing live beginning at 1:00 p.m. eastern on c-span three c-span now, or any time on at c-span.org. >> economist academics testify on the role of corporations and driving up inflation before a house subcommittee for democratic members contend some are contributing to inflation.

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