A few hours ago the SEC and CTFC held a meeting about the current and future states of Crypto and Bitcoin.
From Forbes :
Senate Banking Committee Chair Mike Crapo said today Congress may need to give the Securities and Exchange Commission and other financial regulators more power and clarity to regulate Bitcoin and other virtual currencies.
SEC Chair Jay Clayton left the door open to asking for more Congressional authority at a Senate Banking hearing this morning.
He said that request could come after SEC has consultations with a Treasury Department working group on cryptocurrencies.
The SEC definitely has a need for more computer horsepower to regulate Bitcoin, Clayton said.
Clayton added another need at the SEC is for more workers in its Enforcement and Trading and Markets Divisions but claimed he can’t hire them because of a hiring freeze necessitated by natural cost increases for the agency.
Speaking at the hearing along side of his SEC counterpart, Commodity Futures Trading Commission Chair Christopher Giancarlo complained the current federal system for regulating Bitcoin is a patchwork, not a comprehensive structure.
He said appropriate federal regulation of cryptocurrencies may include: data reporting, capital requirements, cybersecurity standards, measures to prevent fraud and price manipulation and anti-money laundering and “know your customer” protections.
In a personal note, the CFTC head noted Bitcoin has made his college age children more interested in the investing world than they ever have been.
He said attraction to Millennials of Bitcoin adds to the imperative for regulators to examine virtual currencies closely. “We owe it to them to give them a thoughtful and balanced response (to their interest in Bitcoin) but not a dismissive one,” he said.
During the Senate Banking session, Clayton said technological innovation for capital raising should be embraced but not at the expense of protecting investors and the markets.
He said the risks of investing in ICOs and cryptocurrencies are significant because many promoters are not complying with US securities laws and because investors who put money into them may have their money could be sent overseas without their knowledge.
Another risk to investors, said the regulator, is the SEC and state securities regulators may not be able to effectively pursue the overseas bad actors in the products.
He said the issues SEC needs to resolve before approving cryptocurrency Exchange Traded Funds include liquidity, valuation and custody of the funds’ holdings, creation, redemption and arbitrage.
Giancarlo said if blockchain had existed then, it would have enabled regulators to react to the 2008 collapse of Lehman Brothers that helped precipitate the meltdown faster, better calibrated but may not have been able to stop the bankruptcy
To show the weakness of Bitcoin as a currency, Giancarlo noted a Bitcoin conference stopped accepting the virtual currency admission because it couldn’t be processed for payments.
He said the CFTC taking consumer education to libraries because Bitcoin one of most searched topics on library computers.
Both Clayton and Giancarlo said Bitcoin is not a systemic risk now because it is a relatively small market.
Overall I think this meeting concluded in a positive light for all of Crypto. Sounds like the US is on board with blockchain technology but are going to bide their time and see that things are developed properly and diligently. By no means do they want to shut it all down. In fact, it's on the contrary. More regulations to come by the sounds of it. The wild west days of Crypto looks to be slowly coming to an end but when the dust settles we should be left with a safe and solid platform in which the technology can take hold and take us forward on a global scale.