Photo: Mikhail Nilov / Pexels
The Massachusetts Democrat drew a pointed comparison to crypto's regulatory failures during a heated congressional hearing on AI oversight
During a House Financial Services Committee hearing on July 14, 2026, Rep. Stephen F. Lynch (D-MA) pressed Treasury Secretary Scott Bessent to use his department’s resources to investigate the existential risks posed by artificial intelligence. Lynch’s message was blunt: the administration’s current approach to AI governance is heading toward the same regulatory dumpster fire that plagued the crypto industry.
Lynch’s crypto comparison lands with a thud #
Lynch didn’t mince words when drawing parallels between AI’s current trajectory and the crypto industry’s well-documented regulatory gaps. He cited between $200 million and $250 million in industry lobbying expenditures in the crypto space, arguing that letting companies write their own rules produced predictably bad outcomes for everyday consumers.
Lynch accused the Trump administration’s AI Action Plan of systematically dismantling consumer protections and undermining state-level oversight by rescinding prior directives that had been in place.
Bessent’s counterargument: we can’t afford to slow down #
Bessent framed the AI question primarily through the lens of geopolitical competition, particularly with China. According to Bessent, the US currently holds between 55% and 60% of global compute power. His stated goal is to push that figure to 80% by 2028.
AI, tech, and the markets they move—in one daily briefing.
Daily. Free. Join 34,000+ readers across crypto, finance, and policy.
Bessent has positioned Treasury as a central player in this strategy, advocating for voluntary industry guidelines rather than prescriptive regulation. The Treasury Secretary has also been vocal about addressing cybersecurity measures related to AI, acknowledging that the technology introduces new attack surfaces even as it strengthens defensive capabilities.
The policy gap keeps widening #
The Lynch-Bessent exchange reflects a tension that runs much deeper than one congressional hearing. The Trump administration’s AI Action Plan has drawn criticism from multiple Democratic lawmakers for what they view as a systematic rollback of oversight mechanisms. By rescinding prior executive directives on AI safety, the administration effectively reset the regulatory clock. State-level AI regulations, which had been gaining momentum as a patchwork solution to federal inaction, now face potential preemption challenges under the new federal framework.
The hearing surfaced a fundamental philosophical disagreement about how to measure success in technology policy. For Bessent, the metric is market share: compute power, patents, talent acquisition. For Lynch, the metric is harm prevention: how many consumers get burned before someone steps in.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our