The SEC Supportive of Clarity and Fairness in the Crypto-Space: Testimony before the US Senate
Jay Clayton – US Securities and Exchange Commission [SEC] chairmen, will be adding out the approach towards cryptos by the regulators in a testimony before the US Senate tomorrow [Feb 6]. Information released on a copy of the testimony on the Senate’s website. The chairman did highlight how digital currency exchanges are on high-priority when it comes to future regulation:
“As [Commodity Futures Trading Commission] Chairman [J. Christopher] Giancarlo and I stated recently, we are open to exploring with Congress, as well as with our federal and state colleagues, whether increased federal regulation of cryptocurrency trading platforms is necessary or appropriate. We also are supportive of regulatory and policy efforts to bring clarity and fairness to this space.”
The exchanges are [per moment] functioning under regulation with licenses delivered on a state-by-state basis designed as money-transmission services. This status directly stands outside the scope of reach of the SEC and the commodities futures regulator, the CFTC. [For example – Coinbase, one of the most-famous and largest exchanges with HQ in San Fransisco owns 35 US states licenses of the sort].
The CFTC’s chairman will also stake his agency’s claim over cryptocurrency exchanges in his testimony, highlighting the fact that, although the agency has no regulatory oversight over exchanges, it does have investigatory powers, such as the ability to subpoena exchanges.
However, the CFTC chairman added that the agency does not regulate retail investors, only professional traders. Continuing that the CFTC has enough reach to shield crypto-derivatives investors like bitcoin futures and that any extension in its authority over spot exchanges would require legislative amendment.
“Such extension of regulatory authority would be a dramatic expansion of the CFTC’s regulatory mission, which currently does not give the CFTC regulatory authority (distinct from enforcement authority) over cash commodity markets,” Giancarlo will testify.
A new system taking the place of the state-structure licensing would be welcoming by the crypto-industry advocates. The Washington DC-based advocacy group – Coin Center, according to a released report added that increasing the grasp of federal powers over cryptocurrency exchanges opens gates for regulation that go parallel with internet businesses:
“Federal oversight could be an opportunity to fix broken state-by-state money transmission licensing,” says Jerry Brito, Coin Center’s executive director. “It depends on how it’s done, but it could be beneficial.”
On the other hand, for digital currency investors that have seen BTC holdings dip 60 percent in value in just a month, such regulatory developments could be of cold comfort. Peter Van Valkenburgh – Research Director of Coin Center added on the subject about which regulator would be more preferred:
“The CFTC would be the more sensible regulator for cryptocurrencies that are not securities.”