The United States government held a Senate hearing on cryptocurrencies! Jeremy’s self-named “banger in the chamber” gives you the rundown on the most important information and news from the congressional hearing, giving you some hot takes of how the government thinks about and is potentially handling the cryptocurrencies, ICOs, and blockchain industry developments.
So the CFTC and SEC are two government entities that deal with securities and trading. They were both called down to Congress to help their colleagues try and understand what the hell is going on this crazy newfangled cryptocurrencies and ICOs. So you might not have heard about this news, especially if you don’t enjoy C-SPAN as much as I do…
Anyway, there was a US Congressional Committee hearing about cryptocurrencies, ICOs, and blockchain technology in general. The hearing featured Christopher Giancarlo, head of the US Commodities Future Trading Commission (CFTC), and the head of the US Securities and Exchange Commission (SEC) Jay Clayton.
They were briefing a bipartisan Commission on what the fuck has been going on with this crazy new Internet magic money market or whatever the hell it is, and it was actually pretty entertaining — at least for C-SPAN! A lot was made clear throughout the hearing. So here’s my five top takeaways from what went down.
Hot Take #1
The SEC put ICOs on notice, while not really taking an aggressive stance on cryptocurrencies. Senator Mark Warner of Virginia proved to be one of the most vocal supporters of this technology. For a little background on Warner: he made his money — and he made a lot of it — investing in the technology that would lead to cellphones way back in the 1980s. He took a gamble on a technology that he believed would changed the world, and he sees a lot of parallels between his experience and the experience of crypto investors.
Warner was quoted as saying,
“You can’t really separate cryptocurrencies from there backing blockchain technology.”
It’s really supported by the fact that when Bitcoin was introduced, in the Whitepaper, that’s how we got the term blockchain and blockchain technology. Is this an omission that they realize? Trying to regulate blockchain is really something that’s unregulatable? I wouldn’t go as far as to say it’s impossible. However it might be a step in that direction.
Giancarlo and members of the committee like Elizabeth Warren were sure to distinguish between established cryptocurrencies and ICOs. And they were not so kind towards the latter…
Hot Take #2
The SEC will go after IOCs and their enablers. Lawyers, accountants, and advisers of ICOs are all considered to be enablers, and they face the possibility of prosecution. (Learn more about what an ICO is here.)
I know a few people in this space that we’re treading very lightly when it came to filling these roles on ICOs. I’ve also seen people scoff at the thought that they could be prosecuted for helping the sale of an unregistered security. Obviously the latter was wrong.
This is pretty much a situation of the government saying, ‘Well, we might not be able to regulate cryptocurrencies, but we sure as hell can regulate the ICOs that happen within our borders!’
Hot Take #3
The ICOs that were careful? They might be alright. An interesting fact that came out of the hearing is that zero ICOs have registered as a security with SEC. Additionally there are no upcoming ICOs that have registered with SEC.
But that doesn’t mean everybody ignore the SEC to the same degree… For example, while Filecoin never registered as a security, they did take steps towards compliance including limiting their sale to just accredited investors.
The SEC has limited resources so they’re not going to go after the ICOs that at least made an effort to go towards compliance. They’re gonna go for the fraudulent ones or the ones that just straight out ignore them.
Hot Take #4
Will there be a government regulated crypto market? This one’s going to be short. Don’t expect a Bitcoin ETF any time soon. Seriously… just don’t…
Hot Take #5
The dinosaurs are evolving! By far, the funniest part of the hearing was when Giancarlo was asked what HODL meant. And of course he described in front of all these Congress people that don’t really know about cryptocurrency or blockchain what exactly it meant.
That shows me that it’s gotten to the point where it’s impossible for these legislators to ignore this crypto/blockchain issue that keeps popping up right in front their faces. This is creating a pivotal time for blockchain, and it’s exciting to see if governments are going to slowly adopt or go kicking and screaming.
So how did this whole hearing really impact crypto? On a scale of one to ten (one being complete FUD, ten being moon), I’d say it was about a seven. I walked away from the hearing cautiously optimistic!
So those are our hot takes from the CFTC and SEC hearing on crypto and blockchain. If you enjoyed our video please like it and also subscribe so you don’t miss out on any future hot takes! Be sure to check out our site for all your crypto informational needs too. This was Jeremy from Blockchain WTF, and we’ll see you next time.
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