Today, Tuesday Feb. 6th, 2018, the Commodity Futures Trading Commission and the Securities and Exchange Commission will be meeting with the Senate Banking Committee to discuss virtual currencies. Chairman of the Commodity Futures Trading Commission (CTFC) J. Christopher Giancarlo and Jay Clayton from the Securities and Exchange Commission (SEC) will be addressing Congress about the CTFC and the SEC’s role as overseer's of virtual currencies.
Over the past month, the CTFC and the SEC have filed lawsuits, launched investigations, overseen Bitcoin futures launches and issued warnings to investors. The world of cryptocurrency is currently like the Wild West. There are no investor regulations or policies in place that would prevent investors from getting scammed out of their money and no single person owns the Blockchain. Because of this, it is difficult for the government to try to step in and regulate virtual currencies like Bitcoin. Many fear that if a centralized federal agency gets there hands on a decentralized system like Bitcoin, the system will break down or they will be taxed out of the wazoo. However, Clayton and Giancarlo have a more optimistic outlook, it seems as though Clayton and Giancarlo believe they will be able to compromise with lawmakers. Giancarlo said:
’Do no harm' was unquestionably the right approach to the development of the Internet. Similarly, I believe that 'do no harm' is the right overarching approach for distributed ledger technology. ... With the proper balance of sound policy, regulatory oversight and private sector innovation, new technologies will allow American markets to evolve in responsible ways and continue to grow our economy and increase prosperity.
Giancarlo could be hinting toward a hands-off approach to virtual currency regulation; an approach that resembles Laissez-faire, the idea that the government should do their best not to tamper with a free market because the free market will work itself out to the point of efficiency.
As Chairman 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.
Both Clayton and Giancarlo seem to be hopeful that there is a place for Blockchain technologies and cryptocurrency within the legal space. Today’s hearing may be the most significant hearing ever held for cryptocurrencies. The outcome of today’s 10 a.m. meeting with Congress can change the future for cryptocurrencies, it all depends on what the outcome of the meeting is.