US Representative Bill Huizenga has called for Congress to bring its focus towards sorting out the “muddied and fairly opaque” regulations surrounding ICOs and cryptocurrencies.
Huizenga is both a member of the House Financial Services Committee and a prime contender for the panel’s leadership, should the Republican party retain control of the House of Representatives after the midterm elections in November this year.
If appointed to that role, clarifying how regulators should deal with cryptocurrencies is at the top of his agenda. Huizenga told Bloomberg that Congress needed to work with regulators like the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) in order to improve investor protection. He also suggested that these bodies could be granted new powers to ensure that digital assets are as regulated as stocks, commodities and currencies.
However, one issue needs to be cleared up first: what, exactly, is a cryptocurrency? And what is a token? “Everyone’s trying to figure out whether it’s fish or fowl,” Huizenga said, though “it turns out it might be a platypus.” A digital asset is, “kind of an unknown, or something sort of in between,” and so, “how do we deal with that?”
His views are in line with CFTC chair J. Christopher Giancarlo who in February testified to the Senate Banking Committee. In 2015 the CFTC “determined that virtual currencies, such as Bitcoin, met the definition of ‘commodity’.” However, it does not have any jurisdiction over “markets or platforms conducting cash or ‘spot’ transactions in virtual currencies.” This means that cryptocurrency exchanges effectively slip through the regulatory net, though futures contracts do fall into the CFTC’s purview.
Though Giancarlo hinted that the CFTC would need new powers if it was to be the body responsible for regulating spot trading in digital assets, he described such a change as a “dramatic expansion” of its power, one which would require “a statutory amendment of the CEA (Commodity Exchange Act).”
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