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February 06, 2018 at 07:56 AM
The heads of the Securities and Exchange Commission and the Commodity Futures Trading Commission told lawmakers Tuesday that while the regulators do not have direct oversight of the U.S.-based cryptocurrency trading platforms that have elected to be regulated as money-transmission services, legislation may be needed to expand their authority.
SEC Chairman Jay Clayton told senators during a Senate Banking Committee hearing to explore the SEC and CFTC’s oversight of the cryptocurrency market that he and CFTC Chairman Christopher Giancarlo — as they’ve stated previously — “are open to exploring with Congress, as well as with our federal and state colleagues, whether increased federal regulation of cryptocurrency trading platforms is necessary or appropriate.”
Senate Banking Committee Chairman Mike Crapo, R-Idaho, asked Clayton and Giancarlo whether the agencies have “sufficient” regulatory authority over the cryptocurrency market, or if “Congress should address revising and refining our financial law so that one agency or a group have complete jurisdiction?”
Clayton responded that all of the regulators should come together — the Federal Reserve, state regulators, bank regulators and Treasury’s Financial Crimes Enforcement Network, as well as the SEC and CFTC — to devise a “coordinated plan for dealing with virtual currency platforms,” adding that an “additional legislative” remedy may be needed.
Added Giancarlo: “There’s a lot of noise around cryptocurrencies, and regulators must help set the record straight. We’ve never conducted this much outreach for any other financial product.”
During his opening remarks, Crapo noted that “today, the market capitalization of Bitcoin is roughly $115 billion. This is an incredible rise given that in 2013, when this Committee had subcommittee hearings on the topic, the total value of Bitcoin in circulation was approximately $5 billion.”
Clayton reiterated that to date no ICOs have been registered with the SEC, and the SEC also has not approved for listing and trading any exchange-traded products (such as ETFs) holding cryptocurrencies or other assets related to cryptocurrencies. “If any person today says otherwise, investors should be especially wary.”
He added that “from what I’ve seen, ICOs are securities offerings.”
Sen. Elizabeth Warren, D-Mass., probed Clayton on why ICOs have not registered with the agency, asking “how do we make them safer?”
In 2017, Warren said, “companies raised more than $4 billion in ICOs. How many of those ICOs registered with the SEC?”
Clayton responded: “Not one.”
Warren probed further: “As of today, how many companies have registered for upcoming ICOs?”
Clayton responded: “Not one.”
