House Subcommittee Holds First Ever Hearing On Cryptocurrencies, ICOs

• House Hosts Crypto Meeting for "Clarity" on Regulations

House Hosts Crypto Meeting for “Clarity” on Regulations

The US House of Representatives finally gave ear to the emerging cryptocurrency market this Wednesday.  Mid-morning on March 14th, 2018, the Capital Markets, Securities, and Investments subcommittee held a testimony entitled “Examining Cryptocurrencies and ICO markets.”

The hearing took place in the Rayburn House Office Building, featuring a number of key industry movers as participants. For witnesses, the subcommittee invited Mike Lempres (Chief Legal and Risk Operator at Coinbase), Robert Rosenblum (partner at Wilson Sonsini Goodrich & Rosati), Peter Van Valkenburgh (Director of Research at Coin Center), and Dr. Chris Brummer (Professor of Law at Georgetown University).

According to the hearing’s memorandum, the subcommittee intends to “conduct an overview of the cryptocurrency and Initial Coin Offering (ICO) markets.”  As a burgeoning asset class, cryptocurrencies “have been growing rapidly, attracting significant attention from investors and start-up enterprises in search of capital,” the memo states.

The hearing seems to suggest, if anything, that the market’s exponential growth has given sway to the House’s attention.  It’s a topic US officials feel that they can no longer ignore, and the subcommittee will look to survey the “efficiencies and potential capital formation” that cryptocurrencies and ICOs offer, with an aim  to “review the adherence to applicable laws so that investors receive the full protections afforded by the federal securities laws.” This will include “[considering] the current regulatory approach that regulators, such as the Securities and Exchange Commission, are using to monitor and oversee cryptocurrencies and ICOs and how to achieve further regulatory clarity in these markets.”

Hopefully, “clarity” will be one of the takeaways from the hearing.  The US Senate only recently held its own hearing regarding cryptocurrencies and blockchain technology.  Jay Clayton of the SEC and Christ Giancarlo of the CFTC both gave testimony, vouching for their respective agencies’ roles in the matter and the regulatory parameters currently in place.

Still, the meeting breached (but did not clarify) the topic of regulation in the United States.  With the IRS labeling crypto as property for tax purposes, the SEC branding ICOs and their tokens as securities, and a federal judge ruling on behalf of the CFTC that cryptos are commodities, the US’s regulatory landscape is charted but ill-mapped.  The question still remains as to what form regulations will take and how US legislators intend to define cryptocurrencies in formal policy and legislation.

Hopefully, the House’s hearing will clear up some discrepancies and misinformation to give US citizens a clearer direction as to where crypto regulations are headed in the future.