Crypto Industry Warns Congress to Figure Out Regulation Before It’s Too Late

Crypto Industry Warns Congress to Figure Out Regulation Before It’s Too Late

The leaders of American crypto industry have met with lawmakers in Capitol Hill for a roundtable discussion, mainly focusing on regulation for ICOs and digital currencies. More than 50 executives of companies in both traditional finance and blockchain industry have represented such giants as Coinbase, Kraken, ConsenSys, Nasdaq, Circle and Fidelity among others.

The gathering was organized by Republican Congressman Warren Davidson, who is already held in quite a high regard in the digital asset community due to his crypto-friendly outlook. Mr. Davidson is currently drafting a crypto regulation bill, which will be introduced in the House of Representatives later this fall.

The discussion took place in the last session before election, giving a good chance for crypto aficionados to voice their concerns about regulation of the crypto sphere. The main message was clear: lawmakers must adopt a clear and firm policy towards crypto or else the blockchain companies will be forced to look for pastures new.

A persisting complaint was the fact that the US Securities and Exchange Commission uses a ruling from a 1946 Supreme Court case to determine whether a financial asset is a security or not. SEC Chairman Jay Clayton has repeatedly stated that he does not intend to change those standards to adapt to the emerging digital asset industry.

Mike Lempres, chief policy officer at Coinbase, reaffirmed the need for a change, saying that, “We all want a fair and orderly markets, we want all the same things regulators do. 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.“

Carla Carriveau, a senior officer at Circle and a former SEC official responded that even If SEC clarifies existing laws, it is up to the Congress to step up. According to her, “Congress has to act because the SEC has said what they thought was right, and already did what they thought they needed to do.“

As of right now, SEC treats all ICOs and virtual currencies as securities, with the exceptions being the two big ones – bitcoin and ethereum. Panelists revealed that numerous crypto companies are unsure if their projects are SEC-compliant and this could have negative repercussions, as companies are afraid of misinterpreting laws. Meanwhile, SEC is focused on consumer protection, cracking down on ICOs. Admittedly, some of them proved to be fraudulent but others have suffered due to mild violations, like not registering with the agency.

ConsenSys lawyer Joyce Lai reminded the lawmakers that since cryptocurrencies are not tied with any government, their founders have little to no restrictions on the location of their business. At least half of the participants warned that US regulators need to give clarity without cracking down on crypto businesses or else the projects will move to crypto-savvy territories, like Malta or Switzerland.

After four hours of discussions, Congressman Davidson reminded that his crypto bill is still not finished and the panel was a great way to listen to the industry and decide what to include before the final draft is introduced to the lawmakers.

He said that “Legitimate players in the industry have a desire for some sort of certainty so we can prevent and prosecute fraud. I’m confident we can move forward and make this a flourishing market in the U.S. It’s imperative for us to do, we did it well with the internet.“

Tom Emmer, another Congressman, trying to introduce bills that would support blockchain tech, added that time is running out and the time to act is now. His Republican colleague Darren Soto supported this opinion, stating that, “I’m sensing we may need an entirely new category that treats this like a new asset, so that we’re not trying to squeeze a square peg into a round hole. There needs to be some streamlining based on the definitions of digital assets.“

Image Source: “Flickr”

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