As the cryptocurrency mania doesn’t seem to have an end, the United States lawmakers from both the House of Congress and the Senate in rare bipartisanship are coming together to recommend more federal oversight on cryptocurrencies.
The Senate Banking Committee has already conducted a recent hearing with the heads of the SEC and CFTC and enquired about the steps respective boards are taking to understand and protect retail investors.
Although the overall tone of the Senate Cryptocurrency hearing was optimistic, some Senate members like Tim Cotton has raised concerns about Bitcoin and Cryptocurrencies in general.
Much of these calls for tougher regulations have been coming from the increased speculation in the markets and the number of the sketchy Initial Coin Offerings promising returns which seem unrealistic.
Even the members of the Republican Party, who usually want less federal oversight on the markets have been very vocal about regulating cryptocurrencies.
Tom MacArthur, A Republican from the Financial Services Committee has said to Reuters: “We have to look carefully at all of the cryptocurrencies and make sure individuals don’t get taken advantage of”.
SEC on ICO’s
The head of the United States Securities and Exchanges Commission, Jay Clayton, has recently promised the Senators that his team is issuing guidance and warnings to the companies pursuing Initial Coin Offering’s(ICO).
He also promised that any fraudulent companies doing the Initial coin offerings or the public companies which are trying to ride this wave without any underlying technology will be brought to the books and be served notices.
As the growth was so explosive, the government departments didn’t have adequate time to understand whether the cryptocurrencies are a security or a commodity and what laws should apply to them.
Investor education about the potential problems with cryptocurrency investing is another thing that seems to be on the agenda for the government departments.
Global Regulatory Outlook
Lawmakers from India, China, France and Germany seem to be similarly concerned about the new technology which could challenge the existing global financial system.
Controlling the monetary framework through a central bank is a very important part of how a nation-state works and the growing adaption to the cryptocurrencies only seem to be making the lawmakers warier.
The tax departments from every country are spending more time understanding how to adapt to the new virtual currencies considering the total global market cap crossed $500 billion.