LabCFTC CEO addresses Crypto Regulation during Congressional Hearing

LabCFTC CEO addresses crypto regulation during yesterday’s Congressional hearing. He has cautioned officials against “hasty regulatory pronouncements” in his speech.

19 July, AtoZ Markets – The director of one of the primary financial markets’ regulators in the US, the Commodity Futures Trading Commission (CFTC)’s fintech initiative has warned against what he called “hasty regulatory pronouncements.” He has shared his outlook during a Congressional hearing this Wednesday. 

LabCFTC CEO addresses Crypto Regulation during Congressional Hearing

The commentary from the director of LabCFTC, Daniel Gorfine has been addressed members of the US House Committee on Agriculture. Reportedly, the Committee has sought testimony on the issue of cryptocurrencies and digital assets. The ex-JP Morgan Blockchain head Amber Baldet, former CFTC chair Gary Gensler and A16Z managing partner Scott Kupor have been also supporting Mr. Gorfine. 

Mr. Gorfine has stated that many different things can be seen as “commodities.” However, not all of them would warrant attention from the US officials. He has added:

“It’s only when we start to see the rise of futures or swaps products built on those commodities that we have kind of direct oversight. We all have the shared goal to bring clarity and certainty to the market but [we] also need to be sure that we are thoughtful in our approach and do not steer or impede the development of this area of innovation. Indeed, while some may seek the immediate establishment of bright lines, the reality is that hasty regulatory pronouncements are likely to miss the mark, have unintended consequences, or fail to capture important nuance regarding the structure of new products or models.”

He then also noted that it is important not to be “hasty” in the process of figuring out the borders for the application of the securities law and the commodities framework. 

US Congress’ Crypto Sentiment

The Congressional hearing has seen a lot of discussions in regards to what some members of Congress think about cryptocurrencies. For instance, Collin Peterson has stated that much of the cryptocurrency ecosystem “seems like a Ponzi scheme.” He has asked other members: “What’s behind this?”

Mr. Gensler has reacted to Peterson’s comments by stating that “there’s really nothing behind gold either … what’s behind it is a cultural norm, for thousands of years we liked gold.” He added:

“We do it as a store of value, so bitcoin is a modern form of digital gold. It’s a social construct.”

Moreover, some other committee members expressed the need for more clarity in regards to cryptocurrencies. Rick Allen has been quoted as saying:

“We’re creating another money supply here as I see it. I just don’t know how that works. Our dollar sets the mark for the world. I can’t visualize how this would work.”

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