Capitol Hill Legislators Probe Crypto Industry, But Little Resolvedbr>
Capitol Hill lawmakers are itching to regulate the domestic cryptocurrency markets.
Members of the House Financial Services Committee met with experts on Wednesday to discuss investor risks. While no decisions were reached, it’s yet another sign that regulators will not go gently on the nascent digital currency markets.
Testifying as industry experts were Peter Van Valkenburgh, director of research, Coin Center; Dr. Chris Brummer, Professor of Law, Georgetown University Law Center; Mike Lempres, Chief Legal and Risk Officer, Coinbase; and Robert Rosenblum, Partner, Wilson Sonsini Goodrich & Rosati.
Their testimony was no walk in the park.
“Cryptocurrencies are a crock … what social benefit do they provide? … You’re gambling on its value for no social benefit,” said crusty Rep. Brad Sherman (D-Calif.) at the hearing. “They’re popular with guys who sit in their pajamas and tell their wives they’re going to be millionaires.”
Some regulators were more generous, and worried that instituing too many restrictions may stifle innovation. They also posed concerns about cryptocurrencies being securities or commodities.
Rosenblum, a partner with Wilson Sonsini Goodrich & Rosati, said a comprehensive legislative and regulatory system governing blockchain and cryptocurrency should be instituted over time.
“I believe it is too early for Congress and the federal regulators to enact a comprehensive legislative or regulatory scheme governing cryptocurrency,” Rosenblum said. “With a few exceptions, widespread efforts to develop tokens and token platforms began in earnest late last spring, so that for the most part we have had less than a year’s experience with tokens and token platforms.”
Coin Center’s Van Valkenburgh said state regulations should be considered, while Lempres said new laws weren’t needed. There are plenty of regulations already on the books and at least four regulatory agencies to enforce them, including the SEC, CFTC, FinCEN, and the FTC.
A warning was also veiled and issued: if regulators come down too hard, the decentralized industry may find a friendlier country for their headquarters.