Saturday, 24 February, 2018

As Bitcoin Plunges, US Senate Again Focuses on Virtual Currencies

US Regulators to Back More Oversight of Digital Currencies US regulators to back more oversight of virtual currencies
Nellie Chapman | 07 February, 2018, 11:43

One of the nation's top financial regulators pressed for greater coordination on regulating trading of cryptocurrencies at a hearing Tuesday.

Chairman Giancarlo: "We owe it to this new generation to respect their interest in this new technology with a thoughtful regulatory approach".

The Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) discussed their roles in digital currencies, Blockchain, and ICOs to the Committee on Banking, Housing, and Urban Affairs in an open session on Tuesday that lasted for around 2 hours. The fact is that the most important financial regulators in the world are giving their views about cryptocurrencies.

U.S. regulators on Tuesday joined a growing chorus of officials saying they may need new powers to regulate cryptocurrencies which pose risks the investing public does not recognise.

The SEC will go after lawyers and firms that try to circumvent those rules, he said, although he did not clarify if the SEC would pursue ICOs that have already happened. He added that the federal government is still studying how cryptocurrencies differ from traditional investments - in some cases appearing to function as a security like stocks, while at other times as a commodity like gold, and at still other times as a conventional currency like the dollar.

The takeaway from the hearing: USA regulators see the transformative potential within blockchain technology and cryptocurrency. As the hearing wore on, the price of bitcoin briefly rose past $7,300, and cryptocurrency enthusiasts on Reddit - a popular venue for discussions about the technology - celebrated the remarks.

Bitcoin, the world's most widely traded digital currency, has slumped more than 50 percent to around $8,000 since December, while prominent bitcoin exchanges have suffered hacking attacks and outages in recent weeks.

"We intend to be very aggressive, if nothing else, so that people like my niece can have some security that there aren't fraudsters and manipulators out there-and there are a lot, too many, far too many of them", Giancarlo said.

"I don't think the gatekeepers that we rely on to assist us in making sure our securities laws are followed have done their job", Clayton said.

As the price of Bitcoin and other cryptocurrencies rose past year, investors flocked to the largely unregulated assets.

Congressional sources told Reuters the hearing will largely be a fact-finding exercise focusing on the powers of the SEC and CFTC to oversee cryptocurrency exchanges, how the watchdogs can protect investors from volatility and fraud, and the risks posed by cyber criminals intent on stealing digital tokens. But they see a nascent market in need of more observation.