US Chamber of Commerce Tells SEC, CFTC, and CFPB to Begin Regulating ICOs
The US Chamber of Commerce, which is built to represent large corporations and SMEs in the United States, is reportedly urging America’s largest regulatory bodies to begin regulating initial coin offerings (ICOs).
The Chamber of Commerce recently introduced their “Eight Fintech Principles.” One broad theme across those principles is that the group is requesting regulatory authorities encourage new and unique capital raising methods – including ICOs.
Understandably, the group wants ICOs to proceed in a regulated environment. The Chamber of Commerce is advocating that parties should advocate for “tailored oversight and strong consumer and investor protections” as groups like the SEC, CFTC, and CFPB pursue regulation.
The purpose of the Eight Fintech Principles report was to “bridge the gap between technology and DC.”
This is an important change for sentiments across corporate America. One analyst called it:
“a new shift…in regulatory sentiment in the US.”
Instead of trying to ban or limit ICOs, the Chamber of Commerce appears to be encouraging them – they just want them to take place in a regulated environment.
The Chamber of Commerce is also one of the world’s largest business organizations. When they speak, it has big implications across the United States and the world.
In the Eight Fintech Principles report, the Chamber of Commerce addresses the disappointing lack of action from organizations like the Securities and Exchange Commission (SEC).
“We urge the SEC to give more guidance on the treatments of tokens and initial coin offerings (“ICOs”) to indicate whether a token is a security so companies can have more predictability and certainty in the marketplace.”
The SEC, so far, has made no definitive ruling on whether or not ICOs constitute unlicensed sales of securities. Various executives at the SEC have suggested that some cryptocurrencies are currencies and others are securities, but we don’t have any actual regulations in place
The Chamber of Commerce made several specific recommendations to the SEC, including:
“An individual or entity who is not certain whether a particular product, service, or action would constitute a violation of the federal securities law may request a “no-action” letter from the SEC staff.”
The organization issued a similar request to the Commodity Futures Trading Commission (CFTC), asking the organization to specifically define cryptocurrencies that are futures.
“For cryptocurrency that is a future, we urge the Commodity Futures Trading Commission (“CFTC”) to provide more guidance and broadly consider expedited no-action letters.”
Finally, the Chamber of Commerce urged the Consumer Financial Protection Bureau (CFPB) to give innovative businesses the opportunity to be successful:
“The Bureau of Consumer Financial Protection (“Bureau”) should adopt a robust no-action letter and advisory opinion process that gives innovators the opportunity to receive regulatory certainty they need to be successful.”
As you can see, the Chamber of Commerce is particularly interested in no action letters. No action letters are common with the SEC. Any individual or business can request a no action letter from the SEC if they’re uncertain whether or not their business violates federal securities laws. If the business or organization receives that letter, then the SEC is certifying that they would not take enforcement action against that activity. It’s a valuable layer of protection for companies who operate in perceived “grey areas”.
Ultimately, the lack of action from US regulators is frustrating many. 2017 was a banner year for ICOs and many people assumed more regulation would be coming in 2018. To date, however, America’s largest regulatory agencies have stayed largely quiet on the issue.
The US Chamber of Commerce clearly isn’t impressed. They’re urging the SEC, the CFTC, and the CFPB to adopt crypto and ICO-related regulations in the near future. One of the key demands is to allow innovative companies to receive “no action letters” from the regulatory bodies, indicating no further regulation would be forthcoming.
Stay tuned to see if the Chamber of Commerce’s request has any effect on the SEC, the CFTC, and the CFPB.