US Regulators Plan Cryptocurrency Exchanges Oversight, as Christopher Giancarlo, chairman of the Commodity Futures Trading Commission (CFTC), and Jay Clayton, chairman of the Securities and Exchange Commission (SEC), will both provide the testimony to the Senate Banking Committee.
6 February, AtoZForex – Cryptocurrencies have appeared as a key trend during 2017. While so far this year, the digital currencies do not enjoy much of a rally, investors’ interest still is not decreasing. Following the boom in the demand for cryptocurrencies, some of the regulators believe that this market needs more oversight in order to prevent misconduct. One of the latest initiatives comes from the US, where the primary regulatory bodies are about to attend a congressional meeting today.
US Regulators Plan Cryptocurrency Exchanges Oversight
Christopher Giancarlo, chairman of the Commodity Futures Trading Commission (CFTC), and Jay Clayton, chairman of the Securities and Exchange Commission (SEC), will both provide the testimony to the Senate Banking Committee. The testimony will be largely linked to the increasing global concerns about the risks that digital currencies might pose to investors and the financial system.
Both authorities will present a set of rules for cryptocurrency exchanges and propose them to be reviewed. This is according to the preliminary testimony published on Monday.
Some of the online reports state that the hearing might greatly impact the power of the SEC and CFTC in regards to the cryptocurrency exchanges. Reportedly, the hearing will also find out how the regulators might protect investors from fraud, volatility, and cyber risks.
Mr. Giancarlo has stated earlier in the testimony:
“Virtual currencies … likely require more attentive regulatory oversight in key areas, especially to the extent that retail investors are attracted to this space.”
CFTC and SEC Rulings on Crypto Market
The CFTC claims that it oversees digital currency derivatives since 2015. At that time, the regulator has declared cryptocurrencies to be commodities. Yet, it only approved first Bitcoin futures in December 2017. The authority has explicitly stated that it does not have the rights to regulate the underlying Bitcoin market.
The SEC has stated that initial coin offerings are securities and are subject to the same investor protection rules as equity market offerings. Previously, the exchange has stated it might look into the Bitcoin exchanges regulation.
In the meantime, both the regulators have clamped down on the illegal currency firms, these including some ICOs and cryptocurrency scams. Mr. Clayton has written in his prepared testimony:
“We are open to exploring with Congress, as well as with out federal and state colleagues, whether increased federal regulation of cryptocurrency trading platforms is necessary or appropriate.”
Moreover, Mr. Giancarlo has stated that a federal licensing regime for the cash market would help fill in the gap in the current system. It also could include capital requirements and means to prevent manipulation and money laundering.
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