Cryptocurrency discussion on the Capitol Hill
“We’ve never conducted this much outreach for any other financial product” — said CFTC chairman J. Christopher Giancarlo during his opening speech today at the hearing entitled “Virtual Currencies: The Oversight Role of the U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission”.
Giancarlo began his address noting that even his three children, whom he has always tried to interest in the stock market, ended up falling completely for cryptocurrencies. He said the younger generation interests should be respected, but nevertheless watchdogs should protect them, and everyone else, from various fraudsters and those trying to “abuse the system”.
The overall tone of the hearing was mostly positive. As for the SEC chairman Jay Clayton, whose strong speech in front of American lawyers leaked online two weeks ago and showed that he really meant business by saying “Do you think you’re regulated by idiots?”, he said that cryptomarket regulations are vital for consumer protection. He also spoke about ICOs, emphasizing that many ICOs are conducted illegally and should be treated accordingly.
During the Q&A session, Clayton noted that ICOs should be regulated as securities, “end of story”. “You can call it a coin, but if it functions as a security, it is a security”, he said.
Both chief witnesses agreed that national and international education about the cryptocurrencies is needed. This applies not only to elderly people, who often become victims of fraudsters, “whether it’s precious metals, whether its foreign exchange,” Giancarlo said. His agency will also educate librarians about the subject, because it was found that library computers nationwide have been used to make search queries on Bitcoin.
Tokenbox Chief Analytics Officer, Igor Doganov, shares his thoughts on whether the hearing was positive and useful: “No one mentioned bans of any kind, which is definitely a good thing. As the head of SEC said, this market needs help and support, and federal oversight should provide innovations and protection for investors. Bitcoin received most of attention. Speakers admitted that its price has fundamental grounds, as it is based on miners’ expenses.The SEC and CFTC jurisdictions were not questioned in any way, so we expect these agencies to join forces to develop a legal framework, as well as educate investors and protect their assets. The market reacted positively. Bitcoin’s price went as high as $7400, and now tries to fix above $7000”.
Alex Panas, The Token Fund Head of Business Development: “SEC is committed to a stance that all coins and tokens are securities and thus subject to SEC scrutiny. Nothing new here. We already knew about such stance by SEC. But at the same time, Jay Clayton said that it is too soon to demand new legislation targeting cryptocurrencies. However, he said, “We may be back with our friends from Treasury (read taxes) and the Fed to ask for additional legislation”. In general, the hearings brought a positive mood to the market with its balanced approach and linking cryptocurrencies with future”.
