US Congressional support for clarity on cryptocurrencies widens
US Congress has been taking a much higher-profile interest in cryptocurrencies in recent weeks and on Wednesday Congressman Warren Davidson hosted a roundtable event to discuss initial coin offerings and crypto regulations.
The event was held in Washington DC on Tuesday during the final legislative session week before the mid-term elections and hosted around 50 representatives from Wall Street financial services companies crypto firms.
Clarity on regulation
The aim was to help clear up the grey area that exists in the US regulatory framework concerning cryptocurrencies and ICOs, and whether – or not – they represent securities and which regulatory body, therefore, oversees them.
Davidson (Republican, Ohio 8th district) intends to introduce a House bill that would offer “light touch” regulation of the cryptocurrency market – echoing the approach suggested last weekend by Tom Emmer, the new co-chair of the Congressional Blockchain Caucus.
“Our republic has a colourful history of over-complicating and occasionally frustrating the very spirit of enterprise that built our free market economy into what it is today,” Davidson (left) said.
US losing crypto business to Europe
He iterated that while consumers needed protecting from potential fraud, the current confusion in the US regulatory framework had made Europe a haven for cryptocurrency companies, thanks to their crypto-friendly laws.
Indeed, Switzerland – through its crypto hub in the Zug canton, Malta – the so-called Blockchain Island, and the principality of Liechtenstein have emerged as some of the growing centres for crypto and blockchain innovation.
Old rules for new assets
A recurring argument through the session was the US approach in trying to apply decades-old securities regulations to a brand-new and still-evolving asset class.
“It doesn’t have to be done in the same way it was done in the past, and we need to be open to that,” said Mike Lempres, chief risk officer at Coinbase, the US crypto exchange.
“The rules are unclear,” said David Forman at Fidelity Investments. “It’s not right to punish people for making the wrong guess,” he added in response to a spate of recent cease and desist orders issued to crypto firms by the Securities and Exchange Commission (SEC) for selling unregistered securities.
While Davidson’s aim is to present a bill to Congress, it’s “not a cooked thing” he said on Tuesday. However, Congressional support for growth in the crypto and blockchain market is becoming more vocal.
Tom Emmer (Republican, Minnesota 6th district), newly-appointed to co-chair the Congressional Blockchain Caucus, said last weekend that he also favoured a “light touch” regulatory approach and that he intended to submit three bills to enable more clarity on laws relating to the asset class.