Thank you, Chairman Johnson, for convening today’s inaugural subcommittee hearing on this important topic.

It is an honor to serve as Ranking Member of the Commodity Markets, Digital Assets, and Rural Development Subcommittee. I appreciate the opportunity to work with Chairman Johnson as we identify regulatory gaps in the digital assets industry and look towards solutions, and in future opportunities as our subcommittee also works to improve the livelihoods of our rural communities. We have an impressive panel of witnesses before us, and I look forward to hearing from them all.

Over the past several years, there has been a tremendous amount of volatility in the digital asset industry. In February last year, the industry had a combined market capitalization of approximately 2 trillion dollars. Today, however, that number is closer to 1 trillion dollars with Bitcoin alone accounting for about 500 billion dollars. We have seen catastrophic failures in this space, including the collapse of FTX and dramatic shifts in market capitalization over relatively short periods of time.

Even with the Commodity Futures Trading Commission’s limited authorities to regulate digital commodity cash markets, the CFTC has to date brought 70 enforcement actions involving digital asset commodities, and such cases comprised of more than 20 percent of all enforcement actions filed last fiscal year.

Considering these events, it is vital we closely examine current regulations to ensure investors are appropriately protected and that our agencies have the necessary authorities to oversee this new and evolving industry.

Unlike most of the typical commodity market investors under CFTC regulation, a significant number of digital commodity cash market investors are individual retail investors. That means volatility and failures in these digital assets classes disproportionately impacts everyday people and families. For sufficient customer protection, we must consider the everyday person’s lower risk tolerance and ensure appropriate disclosures are readily accessible and clearly communicated.

In considering any digital assets legislation, I would be remiss to not emphasize we must also include the appropriate funding for the CFTC to continue carrying out its mission of promoting the integrity, resilience, and vibrancy of the U.S. derivatives market through sound regulation.

The CFTC is the only federal financial regulator that relies solely on appropriations from Congress. It is therefore our responsibility to ensure any additional authorities and oversight of a technologically complex and unique industry comes with additional resources. Failure to include the appropriate funding would severely undercut any efforts to reach a comprehensive and cohesive regulatory framework for the digital asset industry that incentivizes innovation and protects customers.

With that, I’d just like to thank our witnesses for agreeing to testify today. I sincerely appreciate your willingness to be here and the expertise you all bring to this conversation. I look forward to a productive exchange.