U.S. House Committee on Financial Services and House Committee on Agriculture chairs set out six principles for digital asset market structure legislation

The chair of the U.S. House Committee on Financial Services, French Hill, and the chair of the U.S. House Committee on Agriculture, G.T. Thompson, published a CoinDesk op-ed setting out their proposed principles for federal digital asset market structure legislation, aimed at clarifying regulatory treatment and assigning oversight for key activities in the sector. Their six principles call for legislation that promotes innovation, provides clear classification of digital assets as securities or non-securities, and codifies a framework for issuing new digital assets under the Securities and Exchange Commission with required disclosures and retail investor protections. They also propose regulating centralized, custodial spot exchanges and intermediaries that facilitate transactions in non-security digital assets through requirements similar to other financial firms, including giving the Commodity Futures Trading Commission authority to set rules to protect customers, limit conflicts of interest, ensure appropriate execution of customer orders, and mandate disclosures. Additional principles include requiring entities registered with the SEC or CFTC to segregate customer funds, hold them with qualified custodians, and protect customer funds in bankruptcy, while ensuring decentralized protocols are not regulated as if they were centralized custodians and preserving an individual’s right to self-custody. They stated that the two committees will hold a second joint hearing in May to discuss digital asset market structure legislation.