WASHINGTON — Rep. Alan Bessent (R-Fla.) warned Thursday that delays in passing comprehensive cryptocurrency legislation could expose U.S. markets to heightened risks of fraud and systemic instability. Speaking at a House Financial Services subcommittee hearing, Bessent emphasized that existing regulatory frameworks are “ill-equipped” to address emerging challenges posed by decentralized finance.
The remarks come as bipartisan negotiations over the Digital Asset Market Structure Bill remain stalled in committee. Draft legislation obtained by SourceRated would grant the CFTC expanded oversight of crypto commodities while maintaining the SEC’s authority over security tokens — a compromise that has drawn criticism from both progressive Democrats and crypto-libertarian Republicans.
“We’re seeing bad actors exploit jurisdictional gaps between agencies,” a Treasury Department official told reporters on condition of anonymity. “Every month without clear rules creates more regulatory arbitrage opportunities.”
Market analysts note the urgency follows several high-profile collapses in the crypto sector, including the 2025 bankruptcy of PrimeTrust Exchange that left $3.2 billion in customer assets frozen. Blockchain Association CEO Kristin Smith acknowledged the legislative push but cautioned against “knee-jerk regulations that could stifle innovation.”
With the 2026 midterms approaching, observers suggest the window for passing complex financial legislation may close by August recess. Senate Banking Chair Sherrod Brown (D-Ohio) has separately proposed stricter capital requirements for stablecoin issuers — a measure opposed by major crypto firms.