Senators’ legislation requires crypto companies to disclose key financial information to everyday Arizona investors
WASHINGTON – Arizona senior Senator Kyrsten Sinema partnered with Republican Senator Cynthia Lummis (Wyo.) to introduce the Responsible Digital Asset Advertising Act – legislation protecting consumers by setting advertising standards and disclosures for crypto companies.
Following the financial uncertainty caused by the banking crisis, an influx of new customers have turned to cryptocurrency apps and accounts in search of a safer place for their deposits. The Senators’ legislation protects investors by regulating advertising and ensuring consumers have the information they need to make investment decisions.
“Arizonans deserve the facts about what they’re being sold so they can make informed investment decisions. Our bipartisan legislation ensures consumers are not taken advantage of by ensuring accurate advertising and clear disclosures on crypto products so Arizonans can make the best decisions about their futures,” said Sinema.
“We are seeing a concerning rise in consumers making investment decisions following celebrities and social media influencers promoting digital assets without disclosing they are being paid,” said Sen. Lummis. “Transparency is one of the key reasons people choose to use digital assets, which is why I’m joining Sen. Sinema in introducing the Responsible Digital Asset Advertising Act. This legislation would ensure paid advertisements are disclosed, helping consumers know which endorsements are actually ads.”
Sinema and Lummis co-chair the Financial Innovation Caucus, which aims to highlight responsible innovation in the U.S. financial system. Their Responsible Digital Asset Advertising Act requires crypto companies to:
- Disclose conflicts of interest, like when influencers and celebrities are financially compensated for marketing or promoting crypto assets.
- Rein in outrageous, false, and unprovable claims (such as “get rich quick” schemes) that are being marketed to everyday Arizonans.
- State clearly that past performance of an asset is not an indicator of future returns.
- Tell the truth about hidden fees or charges (processing fees, ACH fees, etc.) as part of investing in a crypto asset.
Importantly, the legislation strengthens transparency and increases accountability in response to recent bank failures.
Click HERE to read bill text.
Last month, Sinema sent a letter urging the U.S. Government Accountability Office to conduct an independent investigation into federal regulators’ failure to conduct proper oversight of Silicon Valley Bank (SVB). Prior to sending the letter, Sinema uncovered in a Banking Committee hearing that there was a substantial lag between when Silicon Valley Bank’s problems were first raised in 2021 and insufficient action was taken before its collapse earlier this month.
In the wake of SVB’s collapse, Sinema and Republican Senator Thom Tillis (N.C.) led a bipartisan group of Senators questioning the Federal Reserve about clear warning signs – including bank leadership’s clear failure to appropriately manage customer deposits – it missed as part of its responsibilities to conduct oversight and examinations ahead of Silicon Valley Bank’s collapse. Sinema additionally cosponsored the DEPOSIT Act – legislation that would claw back profits made by bank executives on the sale of stocks and compensation bonuses earned within 60 days of a bank failure.