SEC Faces Criticism Over Crypto Bill Briefings Ahead of House Hearing

Tensions are rising between U.S. lawmakers and the Securities and Exchange Commission (SEC) over the agency's handling of briefings related to the Digital Asset Market Clarity Act, a pivotal crypto regulation bill. Democratic aides claim the SEC withheld key technical analysis during a recent House Financial Services Committee session, denying answers that had previously been shared with Republican staff. They also noted the absence of subject-matter experts, including Landon Zinda of the SEC’s Crypto Task Force, who reportedly couldn't address basic inquiries.

Representative Maxine Waters, the top Democrat on the committee, is preparing a formal letter to SEC Chair Paul Atkins demanding a detailed technical and impact assessment of the proposed legislation. Her draft letter includes multiple pages of questions aimed at evaluating the bill’s effectiveness in mitigating crypto-related risks and supporting responsible innovation.

The SEC defended its position, stating it provides technical assistance to any member of Congress requesting it, including for crypto-related measures. Still, the lack of transparency has fueled Democratic concerns that the bill may open regulatory loopholes for traditional securities firms.

The Digital Asset Market Clarity Act is a key focus for the crypto industry, which argues that regulatory clarity is essential to attract institutional investors and prevent talent and capital flight overseas. The bill, a follow-up to the Financial Innovation and Technology for the 21st Century Act (FIT21), is set for a House hearing on Wednesday. The House Agriculture Committee will hold a simultaneous hearing due to its shared jurisdiction over digital assets.

Despite internal divisions, some Democrats are supporting the legislation alongside Republicans, signaling a bipartisan push for clearer crypto regulation, even as others remain wary of its potential implications.