After all the heavy correction in the market starting earlier this week, there is finally a moment of glee for investors and crypto enthusiasts.
"Between the enforcement actions brought by your agencies, the hack of the worldwide Coincheck exchange...there is no shortage of examples that increase investor concerns", Crapo said, referring to hackers' recent theft of $530 million from Japanese bitcoin exchange Coincheck.
The crypto markets have added almost $100 billion valuations in the last 24-hours as Bitcoin strongly surges above $8000. At the time of writing, the Bitcoin price was hovering around $8,100.
The two chairmen, along with a number of lawmakers, acknowledged the potential benefits of cryptocurrency and cautioned against regulating the technology too harshly. "So Bitcoin is now being used, it's being used in our American transportation and logistics system", Giancarlo said, professing that his niece is a so-called cryptocurrency HODLer.
"It's important to remember that if there were no bitcoin, there would be no distributed ledger technology".
The Commission has plans to reach out to "key virtual currency demographics, such as Millennials, through digital communications created to engage these demographics through channels and in forums they are predisposed to engage". "Ignoring these developments will not make them go away, nor is it a responsible regulatory response".
Jay Clayton, chairman of the SEC.
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The legislation is a sensible measure to address the products' dangers, they said. NY lawmakers are getting down and dirty with the " Tide Pod challenge ".
"To be blunt, if you are trading cryptocurrencies on a platform that looks like a stock exchange, do not take any comfort from that look", Clayton said. However, as the domestic cryptocurrency market continues to expand in tune with the global crypto economy, clarification and a well-defined policy are of paramount importance for all stakeholders.
Giancarlo and Clayton will say a patchwork of rules for cryptocurrency exchanges may need to be reviewed in favor of a rationalized federal framework, according to prepared testimony published on Monday.
Giancarlo, on the other hand, mentioned the CFTC's ability to obtain and analyze trading data for fraud and manipulation on something like the newly launched bitcoin futures. [Cryptocurrencies are] not correlated with sovereign currencies, so it must be something different than what would move the dollar. Jerry Moran (R-KS), SEC Chairman Clayton, reiterated that unlike the CFTCs approval of bitcoin-based futures, the SEC still has reservations about cryptocurrencies price discovery, custody mechanisms, and volatility.
Both agencies expressed a dire need for more technology experts on the regulatory side to stay ahead of the cryptocurrency trend. A recent study by Ernst and Young showed that nearly $400 million was lost in ICO hacks and in fraudulent proposals past year.
Later in the hearing, Warren asked Clayton about how numerous ICOs on the immediate horizon have registered with the SEC; Clayton conceded that none of them had.
"I hope people pursue it vigorously", Clayton, who was nominated by President Donald Trump, added about Blockchain. I want to go back to separating ICOs and cryptocurrencies.
As for which regulator may be preferred by the industry, Coin Center research director Peter Van Valkenburgh offers this somewhat circular argument: "The CFTC would be the more sensible regulator for cryptocurrencies that are not securities".