After a lot of fear in the market related to the assignment by Bitfinex US justice, February 7 was a hearing before the US Senate about cryptocurrencies. There has been talk of regulation of blockchain technology, initial coin offerings (ICOs), trading platforms, derivatives and ETFs, as well as the use of crypto-assets to perpetrate financial crimes and circumvent international sanctions.
The following is a summary of the points made by Jay Clayton (President of the SEC) and J. Christopher Giancarlo (President of the TCRC):
Regulation of exchange platforms: For the moment, trading platforms are subject to the rules in force in the state they are. Clayton and Giancarlo push for rules to apply at a federal level in the future. According to them, this would allow regulators greater control.
ICO: According to Clayton, ICOs are an effective way for entrepreneurs to raise money. However, they must be
considered as financial securities and must be regulated as such. The SEC will take action against anyone who operates
ICOs that do not comply with the legal framework.
ETF: Attempts to list ETFs for Bitcoin have, for the moment, always been refused. Clayton explains that ETFs primarily target retail investors and are essentially one-way markets. For this reason, the rules governing them must be more stringent than those applying to futures contracts (supervised by the CFTC). It states that the establishment of ETFs could be considered in the future, from the moment these rules are respected.
Clayton and Giancarlo recalled the risks of cryptocurrencies. According to Clayton, the systemic risk associated with crypto that could spread to the rest of the economy is not excluded but that it was relatively low given the relatively small size of the market. Giancarlo announced that the markets were not only constantly changing, but that the generational factor had to be taken into account: the interest of the American youth in cryptocurrencies is strong. Measures must be taken by the government to protect the new generation of investors from fraudsters, but these measures should not discourage the interest of young people.
This intervention in the US Senate was generally very well received by the market, Bitcoin has gone from $ 6,000 to $ 7,650 after the intervention.
