The Congressional Finance Services Committee conducted a hearing this Wednesday, March 14, on the topic of cryptocurrencies and initial coin offerings (ICOs).
The hearing included the U.S. lawmakers going over details of the cryptocurrency industry with market experts, legal professionals, and individuals associated with the industry in order to hatch out details and learn more about the industry that is considered elusive to those who are not in the know.
While the hearing spanned over around two hours and went through a slew of topics, the most notable ones of them pertained to regulations, risks, and investments that are associated with the cryptocurrency industry.
Mike Lempres, chief legal and risk officer of Coinbase – which is one of the largest and most popular cryptocurrency exchanges in the world – also attended the hearing.
Are cryptocurrency exchanges subject to meet the same cybersecurity requirements as other financial institutions?
However, since cryptocurrency exchanges do not fall under the requirements and regulations that conventional financial institutions do, Lempres, when asked about whether Coinbase follows any such requirement, stated that it does not, since it is not required to do so.
That being said, Lempres mentioned that Coinbase follows BitLicense regulations, which is a New York state legislation for cryptocurrency exchanges.
Upon this, Congresswoman Carolyn Maloney expressed the idea that since cybersecurity and the risks pertaining to it are not just one State’s issue, the issue should be looked into by more than one lawmaker in Congress.
Congressional stance on initial coin offerings still needs to be defined
This topic saw some of the most passionate words being used against cryptocurrencies and the people who associate with them, where Rep. Brad Sherman in particular called cryptocurrencies “a crock”, and stated that initial coin offerings (ICOs) are “a fraudulent gambling scheme” which do not hold any real world value. He was also quick to state that ICOs are used by people who are prone to hang around in “their pajamas” and thinking that they are going to be millionaires.
While these comments were of no help whatsoever, the question about the actual regulation of ICOs essentially also went unanswered, as the lawmakers kept discussing how any regulations going to come into effect and whether the U.S. Securities and Exchange Commission (SEC) or the Commodities and Futures Trading Commission (CFTC) would be responsible for them.
Cryptocurrency trading was also mentioned
Rep. Maloney mentioned that she is currently working on a bill that pertains to cryptocurrency exchanges and their trading services. While a definite timeline was not defined, it was perceived that the bill could come to light soon.
Lempres stated that Coinbase is actually waiting for the SEC and CFTC to finalize which division would be responsible for what segment of cryptocurrency operations and their subsequent regulations, so that the exchange could act accordingly if a requirement is presented to it.
The congressional hearing ended with more questions than answers
While the hearing seemed to end with no particular line of action being defined, many platforms noted how it turned into more of a cryptocurrency criticism session than a cryptocurrency hearing by the Congressional Committee, with CNBC terming the hearing as a “bitcoin bash fest.”
However, chairman of the subcommittee, Rep. Bill Huizenga, mentioned that the hearing should be considered as “hello and not goodbye”, alluding towards the possibility that more hearings could be expected in the future, or at the very least, tangible actions could be taken.
“We know that this has moved very quickly,” Huizenga said. “This panel, this Congress is not going to sit by idly with a lack of protection for investors.”