Wall Street, venture capitalists and crypto companies descend on Capitol Hill to debate regulation
September 25 2018 - 5:12AM
ADVFN Crypto NewsWire
- Rep. Warren Davidson, R-Ohio, is hosting a roundtable of
representatives from Wall Street, venture capital firms and the
cryptocurrency industry Tuesday, ahead of a bill he’s drafting for
introduction this fall.
- Fidelity, State Street, Union Square Ventures, Andreessen
Horowitz, the Nasdaq, and the U.S. Chamber of Commerce are
attending, as well as crypto startups Ripple and Coinbase, and are
set to weigh in on how to police the multibillion-dollar
cryptocurrency market.
- “Your input is critical to helping us preempt a heavy-handed
regulatory approach that could stall innovation and kill the U.S.
ICO market,” Davidson said in a letter to invitees.
Nearly 50 representatives from U.S. financial giants and
cryptocurrency startups are set to meet with Washington lawmakers
this week to talk through what some say is an incomplete and murky
regulatory landscape.
Rep. Warren Davidson, R-Ohio, is hosting a roundtable,
"Legislating Certainty for Cryptocurrencies," on Tuesday and asking
industry experts to weigh in on how to police the new asset class
ahead of a House bill he plans to introduce this fall.
"Your input is critical to helping us preempt a heavy-handed
regulatory approach that could stall innovation and kill the U.S.
ICO market," Davidson said in a letter to invitees.
The congressman outlined a list of eight questions for the
meeting, including: "What is the best way to protect consumers from
fraud?" The meeting will also cover private funding disclosures and
token issuance laws, a spokesperson for Davidson said.
Representatives from Fidelity, State Street, leading venture
capital firms Union Square Ventures and Andreessen Horowitz, the
Nasdaq, and the U.S. Chamber of Commerce are among those confirmed
to attend, according to an attendee list seen by CNBC.
Cryptocurrency startups Ripple, Coinbase and Circle are also
planning to be in the room.
Reps. Ted Budd, R-N.C., Tom Emmer, R-Minn., French Hill, R-Ark.,
and Darren Soto, D-Fla., are set to give opening remarks during the
roundtable Tuesday.
The crowdfunding process known as an initial coin offering, or
ICO, caught the attention of regulators after bitcoin surged to
almost $20,000 last year. Other, smaller cryptocurrencies also
attracted floods of retail investors, bringing a total of $12
billion in funding this year alone, according to the latest
estimates from data firm Autonomous Next.
U.S. financial watchdogs have been balancing consumer protection
and innovation in the multibillion-dollar market. Still, crypto
industry leaders have complained that laws need to be updated to
accommodate the complex new digital asset class. Davidson's bill
would be the first of its kind in Congress.
While Congress has yet to address the fundraising craze, the
Securities and Exchange Commission has cracked down this year.
Chairman Jay Clayton made it clear that he will not
look to update securities laws to cater to crypto. Other top SEC
officials have said ether and bitcoin are not securities, but Clayton and
othershave said that other initial
coin offerings should be treated as securities and fall under SEC
jurisdiction.
For now, the Securities and Exchange Commission follows the
"Howey Test" to determine whether or not an asset is a security.
The ruling comes from a 1946 U.S. Supreme Court case that
classifies a security as an investment of money in a common
enterprise, in which the investor expects profits primarily from
others' efforts.
Crypto concerns
Bitcoin and other cryptocurrencies are often described as
anonymous because people don't need to give any identifying
information to send or receive them. While transactions are
recorded on a public ledger, they're listed under an alphanumeric
code known as a "public key," which doesn't reveal the trader's
identity.
Legislators have been especially vocal about criminals abusing
that anonymity. Rep. Brad Sherman, D-Calif., was among those with a
litany of concerns at a House
Financial Services subcommittee hearing in March. He and others
brought up the potential for terrorist financing and for skirting
"know your customer" laws and money transmission standards that
exist for state-backed currencies.
Pat Berarducci, a lawyer for blockchain software technology
company ConsenSys, said most industry participants want to achieve
the same goals as regulators. He compared the fast-paced innovation
and the legal uncertainty to the early dot-com years.
"There are a lot of regulators wanting the U.S. to develop 'do
no harm' policies to allow innovation to grow, just like they did
in the internet era," said Berarducci, who is attending the
roundtable Tuesday.
Since bitcoin and other cryptocurrencies are not backed by a
government, founders have fewer constraints on where to start their
projects. One fear is that if the U.S. cracks down too hard,
founders will flock to less restrictive jurisdictions such as
Switzerland or Malta.
"Businesses and entrepreneurs are making decisions about where
to locate and grow based on regulatory considerations," Berarducci
said. "Policymakers are trying to foster innovation [and] at the
same time protect consumers."
The cryptocurrency market has struggled this year compared with
2017. Bitcoin, the world's largest cryptocurrency, has fallen by 50
percent since January, and the market capitalization of all
cryptocurrency is down by roughly 65 percent, according to data
from CoinMarketCap.com.
Source:
CNBC
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