- Leaders from crypto industry ask for way forward on regulation.
- Apprehensive innovators could head elsewhere and drain potentially profitable crypto businesses.
- The US still stands a chance to become global leader in crypto.
Crypto leaders and experts have urged Congress to expedite the process of coming up with regulations regarding cryptoshpere. The “chilling effect” of uncertainties will hurt U.S innovators who will be afraid of breaking or misinterpreting non-existent crypto regulations.
High Profile Meeting Setup to Discuss Regulations
Over 50 Attendees participating in a roundtable hosted by Rep. Warren Davidson that included experts from NASDAQ, Fidelity, State Street, and Andreessen Horowitz politely but firmly spoke about what they believed were unresolved issues that David was preparing in a related bill this fall. Fidelity Investments’s chief legal officer David Forman captured the mood of the participants stating that:
“If the rules are unclear, unwritten, or unknown it’s not appropriate to punish people for making the wrong guess.”
Of particular concern was using the archaic 72-year-old securities law to cryptocurrencies, which the US Securities and Exchange Commission (SEC) has used in what is called the “Howey Test” from a 1946 U.S. supreme court decision to determine whether digital currencies are securities. Jay Clayton, the chairman of SEC is on record saying he has no plans to update those standards to relate to upcoming trends like cryptocurrencies.
Even though the watchdog could clarify the existing laws to create instances for exemptions, senior regulatory counsel Cara Carriveau from Circle, a crypto finance firm believes it’s only the intervention from Congress that would make a real impact. Carriveau stated:
“Congress has to act because the SEC has said what they thought was right, and already did what they thought they needed to do.”
The SEC has consistently waged war on any company that made moves in what they believe is against the law in the name of protecting consumers. Even though there have been cases with ICOs that were outrightly wrong, others were prosecuted for reasons that were deemed not to be too serious like failing to register with the agency.
Urgent Need for Regulations
Bitcoin and other cryptocurrencies are still developing and the government does not cover them and founders have a free hand to do anything they believe will work. The attendees believe there is still time to redeem the process of regulation and have the US maintain leadership but fear that if the government fails to give a clear direction or the over tighten the noose, innovators will definitely flee to nations and jurisdictions that appear to be crypto friendly. Congressman Warren Davidson stated:
“Legitimate players in the industry have a desire for some certainty so we can prevent and prosecute fraud; I’m confident we can move forward and make this a flourishing market in the U.S. It’s an imperative for us to do; we did it well with the internet.”