US Republicans question Treasury secretary over regulatory loopholes in spot crypto market

Republican lawmakers sent a letter to U.S. Treasury Secretary Janet Yellen seeking answers on how the Financial Stability Oversight Council, which she leads, determines how cryptocurrencies should be defined at the federal level. Lawmakers asked about coordination between the Securities and Exchange Commission and the Commodity Futures Trading Commission. Commodity Futures Trading Commission Chairman Rostin Behnam and Securities and Exchange Commission Chairman Gary Gensler are members of the Financial Stability Oversight Council, which is tasked with monitoring the stability of the financial system. According to a 2022 report, the Financial Stability Oversight Council pointed out existing regulatory loopholes in the digital asset spot market and recommended passing legislation to give financial regulators rule-making powers over the spot market. "Despite identifying these vulnerabilities, regulators have failed to promote an environment that ensures consumer protection and promotes the growth of digital asset innovation in the United States," the lawmakers said in a statement on Tuesday.