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A Financial Services Committee meeting took place on Wednesday morning, with a focus on cryptocurrencies and Initial Coin Offerings (ICOs). In addition to the typical congressional attendees, Coinbase’s Chief Legal/Risk Officer, Mike Lempres, also contributed to the discussion. A brief summary:
· Congress agrees that action needs to occur on this topic (and quickly). US Legislators need to either clarify how existing regulations in place apply or create new regulations geared specifically to these radically different digital assets.
· The committee appeared to be in agreement that minimum cybersecurity regulations should exist for exchanges & marketplaces, similar to those minimum standards in place for traditional banks
· Members of the committee expressed concern about potentially stifling innovation if they choose the wrong regulatory path
· Concerns were raised regarding cryptocurrency being used to fund hate groups (specifically white supremacists and neo-Nazis)
· Mike Lempres reinforced that Coinbase, like many other crypto companies, is heavily focused on compliance. However, they are in a holding pattern as they wait for US legislators to make up their mind.
· A reoccurring theme with nearly any discussion involving Bitcoin & other digital assets, one representative (Brad Sherman) bashed the asset class as a whole, calling it “a crock” & “a fraudulent gambling scheme of no social benefit”
It was obvious that more discussion will be required before there will be any clear direction from US legislators with regards to how digital assets will be classified and what regulations may be imposed from the federal government.
Hearing Outcome: Hot air, no decisions made, no action plan. Par for the course when it comes to government subcommittee meetings, right?
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