For the past few days, cryptocurrency traders have been living in fear surrounding the regulatory environment. After all, a Senate Banking Committee was held yesterday with US market cops outlining regulation in the crypto-space. However, crypto traders and investors were likely pleasantly surprised when the hearing came to a close. At the end of the day, the market cops, CFTC Chairman Christopher Giancarlo and SEC Chairman Jay Clayton, seemed to have a positive view of the market. Today, we’ll talk about how the hearing went, want this means for the cryptocurrency space as a whole, and what you should be watching for ahead.
Market Cops Meet At US Senate Banking Committee
As mentioned above, yesterday, Jay Clayton and Christopher Giancarlo met at the United States Senate Banking Committee to discuss the regulatory fate of the cryptocurrency space. Throughout the hearing, Clayton and Giancarlo gave testimony surrounding potential regulation of the sector. In particular, they were testifying to what should and could be regulated in the cryptocurrency space as well as providing a broader outlook on the long-term future of virtual currency markets as well as blockchain.
At the end of the day, the big concern for Jay Clayton proved to be fraudulent ICOs. Overall, cryptocurrency itself wasn’t a main concern, but Clayton was concerned about ICOs giving fraudsters access to money they did not deserve. On the other hand, Giancarlo seemed to have a genuine enthusiasm for the emerging cryptocurrency market.
In particular, Giancarlo even made it a point to defend some cryptocurrencies, using Bitcoin as an example. Ultimately, Giancarlo pointed to the process of mining and how mining correlates with price as a reasonable form of valuation in the space. Giancarlo even defended the legal aspects of the space, stating that it would make his job easier. Here’s a key snippet from Giancarlo:
The CFTC can now obtain trading data and analyze it for fraud and manipulation… With Bitcoin futures we’re now having visibility into underlying markets and spot markets that we would not otherwise have.”
Nonetheless, there were some concerns with regard to consumer misconception of trading platforms. Ultimately, the unregulated nature of these platforms and the potential of them to mislead consumers into believing that a regulatory net of some kind exists proved to be a cause for concern. Giancarlo went on to say:
To be clear, the CFTC does not regulate the dozens of virtual currency trading platforms here and abroad…”
This was followed up by Claton, who called for an interagency coordinated plan among states, Federal regulators and SEC and CFTC in an effort to address naievte among consumers surrounding unregulated trading platforms. Here’s what he had to offer:
I think our Main Street investors look at these virtual currency platforms and assume they are regulated in the same way that a stock is regulated and, as I said, it’s far from that and I think we should address that.
Breaking This All Down
At the end of the day, the Senate Banking Committee hearing wasn’t the doomsday hearing that many believed it would be for the cryptocurrency space. In fact, the hearing further validated cryptocurrency as a valuable asset which is traded among the masses and derives real value within its system. While there are likely to be further conversations surrounding regulation of ICOs, overall, cryptocurrency is clearly here to stay in the United States and the regulation surrounding it will evolve as popularity grows.
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