Heads Of SEC And CFTC Meeting With Senate About Cryptocurrency

"We are entering a new digital era in world financial markets. As we saw with the development of the Internet, we cannot put the technology genie back in the bottle. Virtual currencies mark a paradigm shift in how we think about payments, traditional financial processes, and engaging in economic activity. Ignoring these developments will not make them go away, nor is it a responsible regulatory response. The evolution of these assets, their volatility, and the interest they attract from a rising global millennial population demand serious examination. With the proper balance of sound policy, regulatory oversight and private sector innovation, new technologies will allow American markets to evolve in responsible ways and continue to grow our economy and increase prosperity. This hearing is an important part of finding that balance."

 
But with the positive review towards crypto comes the discussion of the inevitable downside. The CFTC chairmen's report also outlined the fact that though virtual currencies may for some be potential riches or a technological revolution; for others it can be used as a conduit for fraud and a way to "separate the unsuspecting from their money." Recently the two agencies, along with their counterparts in numerous states, have filed lawsuits against alleged scams and others violating securities law. They have also subpoenaed a major exchange looking for possible impropriety.

What will eventual transpire is unknown. Some believe initial coin offerings (ICOs) and derivatives products like futures are likely to dominate the discussion. Others think it will focus on the risks of fraud in the crypto space and the need for streamlined and consistent regulation of crypto related businesses and exchanges. With the meeting taking place in Washington in only a couple hours, it will be interesting to see what is eventually discussed and how the markets will react.