Crypto provisions included in US defense budget bill.

The US House of Representatives included a cryptocurrency provision in the defense budget bill. It is expected that American regulators should clearly delineate lines of responsibility in the digital asset market.

Republican Patrick McHenry proposed that the SEC and CFTC form a joint working group that will also include representatives from small business, the cryptocurrency industry, and fintech. In addition, industry lobbyists and civil-liberties groups will join them.

If the bill passes, the working group would be established no later than 90 days after signing. Within a year it should analyse the regulatory framework, and its impact on primary and secondary markets. After that, the experts would provide Congress with a report on how the current regulatory regime affects U.S. competitiveness.

According to CoinDesk, the defense authorization bill usually enjoys broad bipartisan support and is considered a must-pass document.

Earlier this week, a coalition of U.S. public-interest groups urged SEC Chair Gary Gensler to step up the crackdown on cryptocurrencies. According to the authors of the letter, many projects in the sector allegedly violate investor-protection rules.  

In August, the head of the regulator warned of tighter oversight of the stablecoin space. He noted that the agency needs additional authority and resources.

That same month the CFTC clarified its authority over cryptocurrencies. The commission regulates derivatives, which is true of digital assets as well. 

In September, Senator Maggie Hassan, a member of the Senate Committee on Homeland Security and Governmental Affairs, sent letters to several agencies expressing concern about the use of cryptocurrency as ransom payments to ransomware operators.

Later, reports indicated that the Biden administration planned to prepare a number of measures aimed at countering cryptocurrency payments to hackers.

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