Senators and witnesses clash over proposed crypto 'innovation' exemption and disclosure rollbacks

Sen. Van Hollen and Sen. Warren highlighted worries that an SEC innovation exemption could create an uneven playing field by exempting some crypto and DeFi platforms from rules that govern traditional brokers, exchanges and intermediaries. "If you're engaged in the securities business, you're being compensated to engage in similar securities activities...the same rule should apply," Ken Benson said in response, arguing for technology-neutral application of existing securities laws.

Sen. Warren also pointed to recent SEC proposals to reduce reporting frequency and exempt many companies from executive pay disclosure; witnesses said reduced disclosure would leave ordinary investors with less information and weaken market confidence. Several senators pressed witnesses on whether federal rule changes or agency actions were increasing risk for retail investors.