Director of LabCTFC Tells Congress: Current Classification of Cryptos Are “Hasty Regulatory Pronouncements”
It has been unveiled that a Congressional hearing took place in the morning of July 18th, 2018, to discuss cryptocurrencies, where they seem to be headed and the most-spoken, regulatory aspects. While many mixed opinions were expressed during the hearing, several officials appear to have a positive stance on the digital assets.
In particular is that of the director of LabCFTC, Daniel Gorfine who strongly believes that the Commodity Futures Trading Commission’s (CFTC) take on cryptocurrencies are hasty, seemingly proposing that this type of viewpoint will fail one to see the whole picture.
As per CoinDesk’s reporting, the discussion supposedly involved the U.S House Committee on Agriculture, which housed individuals like Amber Baldet, former JPMorgan Blockchain Front-runner, Gary Gensler, former CFTC Chair and Scott Kupor, Managing Partner of A16Z.
Despite the confusion surrounding cryptocurrencies and its relative market and how regulation should be carried onwards, Gorfine stated that,
“Indeed, while some may seek immediate establishment of bright lines, the reality is that hasty regulatory pronouncements are likely to miss the mark, have unintended consequences, or fail to capture important nuance regarding the structure of new products or models”.
He stressed the importance of giving time to the new market, as it is still in its infancy state. Further adding that “It’s important that we’re not hasty in figuring out what the contours are of applying securities laws and then commodities framework”.
What did other members have to say about cryptocurrencies? Many made references and comparisons to gold, while others simply view it as a scam.
For instance, Rep. Collon Peterson thinks that the entirety of the crypto market is nothing more than “A Ponzi scheme”, and questioning “what’s behind this?”
As a response to Peterson’s rather straight-forward comment, Gensler said that “There’s really nothing behind gold either […] What’s behind it is a cultural norm, for thousands of years we liked gold.” He added the fact that many turned to gold as an investment to secure their money’s worth, implying that “Bitcoin is a modern form of digital gold. It’s a social construct.”
Rep. Rick Allen does not seem to have a clear understanding as to how cryptocurrencies work, saying, “We’re creating another money supply here as I see it […] Our dollar sets the mark for the world. I can’t visualize how this would work”.
The most intriguing comment comes from the Chairman of the Committee, Michael Conaway, as he simply referred to the illegal activities associated with cryptocurrencies. In particular, he commented with respect to the recent finding that blockchain technology was helpful in confirming that Russian agents interfered with the 2016 U.S Election. Explicitly saying, “As long as the stupid criminals keep using bitcoin, it’ll be great”.