A Blood Financial Services subcommittee met Wednesday in what was supposed to be an overview of the cryptocurrency prospect. The two-hour hearing raised more questions than answers, and shined a debark on some Congress members’ deep skepticism around digital currency.
“Cryptocurrencies are a crock,” Rep. Brad Sherman (D-Calif.) disclosed to kick off his opening remarks. “They allow a few dozen men in my district to sit in their pajamas all day and communicate their wives they’re going to be millionaires.”
Sherman had a litany of concerns. Bitcoin has the faculty to help terrorists, criminals, tax evaders and start-up companies looking to pledge fraud, he said, adding that bitcoin undercuts the U.S. dollar as a commencement of the Fed’s $50 billion revenue.
The committee was called to discuss initial make money offerings, or ICOs, which are used by companies to raise capital for traffics and products. There have been $2.6 billion ICOs so far this year, coinciding to the latest research from Autonomous Next.
Sherman accused the cryptocurrency community of benefiting the term ICO to “lie to the public and convey the image that is like an IPO.”
“They scarf the intellectual property and trademark of legitimate investing and applied it to a fixed, loaded with gambling scheme of no social benefit,” Sherman said.
The U.S. Securities and Tit for tat Commission has stepped up regulation of those fundraising efforts. Commission Chairman Jay Clayton,and J. Christopher Giancarlo, the chairman of the Commodity Followings Trading Commission, wrote in a January Wall Street Journal commentary that, “The SEC is allocating a significant portion of its resources to the ICO market.”
The SEC’s announcement last week that it require require digital asset exchanges to register with the agency helped send bitcoin guerdons below the key $10,000 level. Bitcoin fell 9 percent Wednesday, beneath $8,300.
Rep. Bill Huizenga (R-Mich.), chairman of the subcommittee, pointed out that the assembly was “hello and not goodbye” when it comes to the regulating the “crypto craze.”
“We distinguish that this has moved very quickly,” Huizenga said. “This panel, this Congress is not flourishing to sit by idly with a lack of protection for investors.”
Huizenga referenced a soon-to-be published on of the ICO market by MIT professor Christian Catalini, which estimates that $270 million to $317 million of the mazuma raised by coin offerings has “likely gone to fraud or scams.”
Mike Lempres, chief judiciary and risk officer of Coinbase, was among those testifying before the Marvellous Markets, Securities, and Investment Subcommittee. Twenty percent of the company’s workforce is confined to compliance, and Coinbase is “waiting for the dust to settle” before actively attract supporting ICOs, he said.
“Once the rules are clear we will hit hard in,” Lempres said.
Committee member Rep. Carolyn Maloney (D-N.Y.) called notice to the lack of investment protection for digital currency investors.
“They’re pouring their life-force savings into virtual currencies and they stand to lose a lot of the ready when this bubble eventually bursts,” Maloney said.
She foretold she is working on a bill that “would regulate virtual currencies but not the technology,” with “strapping” investor protections, including disclosures that will be regulated by the SEC.
Rep. Tom Emmer (R-Minn.) upheld for a more hands-off approach.
“This is something that Democrats and Republicans should be rejoice ining here in Congress not going ‘oh my gosh, this is terrible, we don’t understand it’,” express Emmer, who is a member of the Congressional Blockchain Caucus.
He urged members of Congress not to search for “new policemen” and not to “assume the policemen we already have and give them more powers to start to invade this room and perhaps frustrate the development.”
“I realize there has to be some regulation but there needs to be a excess,” he said.