Chairpersons of two US regulators have issued a joint statement expressing concern about the current state of the cryptocurrency markets.
In a report published in the Wall Street Journal, Securities and Exchange Commissioner Jay Clayton and Commodity Futures Trading Commission (CFTC) head Christopher Giancarlo expressed concern over the way many market participants to circumvent the rules and regulations for investor protection in Digital Ledger Technology (DLT).
"Today, we see significant DLT-related market activity that has little or no account of our proven regulatory approach, which worries us," write Clayton and Giancarlo.
Clayton and Giancarlo have brought lawyers, trading platforms and financial service providers to account for their behavior, which the two regulators found "annoying" in many cases. In particular, they reiterated the oft-cited statement that simply wrapping an investment product in a new terminology ("ICO") does not exempt them from the requirements of securities and investor protection.
"Market participants, including lawyers, trading venues and financial services firms, should be aware that many examples of circumvention are worrisome to us," they said.
In particular, Clayton and Giancarlo have pointed out that they consider "frameworks" where a cryptocurrency is exchanged on trading platforms as payment service providers, which primarily have to be regulated at the state level and have so far been deprived of supervision by the federal authorities.