The crypto industry is majorly controversial these days and the discussions on the whole industry are booming in many different countries. On June 15, 2021, the House Financial Services Committee Fintech Task Force was having four major hearings on crypto. Congress appears to be taking a closer look at cryptocurrency. The current crypto bull market, whether bitcoin is terrible for investors and excellent for criminals, and what politicians can or should do about it will be the subject of four hearings in June. to be clear, hearings have been held for many years. What is new is that we are starting to focus on particular topics and instances.
Senator Elizabeth Warren, a former presidential candidate and longtime proponent of consumer safeguards conducted a Senate subcommittee hearing on cryptocurrencies last week. On paper, the meeting was supposed to be on Central Bank digital currencies, but the actual focus turned out to be bitcoin. It was not a good hearing for bitcoin, either.
Warren criticized bitcoin’s price volatility as well as some of the consumer worries about digital assets and the amount of energy necessary to safeguard the bitcoin network. These are not brand-ned issues. However, last week’s hearing as well as three more scheduled for this month, implying that we are approaching a new level of regulatory awareness: the important timeline events are:
- Regulators are aware but not particularly concerned about bitcoin’s debut and we have seen some guidance from the Internal Revenue Service of FinCEN on how it will be handled.
- The ICO boom occurs and the securities and exchange commission reacts with the DAO report and following enforcement proceedings.
- More and more attention is paid to stablecoins and the regulations in this regard.
- The coronavirus epidemic breaks out around the same time, and authorities begin to consider central bank digital currencies as a regulated, government controllable alternative to stablecoins.
- When it comes to platforms and regulation, this is a hot topic for discussion as well. The regulations are not as strict when it comes to exchanging platforms, however, in the majority of states, bettings and in this case crypto betting in the US was under strong pressure. However, the Senate hearings have emphasized dozens of cases when the legal actions were not protected and more and more people were becoming involved in the betting process. Those actions are one of the most important discussion topics in the current Congress hearing.
Odds and ends
Regulatory-wise there has been a lot of noise lately. It is happening all across the world, not just in the United States and it has been a bit mind-blowing. The most interesting is that all of the measures we have seen so far indicate that policymakers perceive crypto as something that can and should be regulated, but not as something that can or should be outlawed. There are some recent important developments in the industry:
- FinCEN announced that as part of its regulatory goals, it will complete its crypto-related anti-money laundering activities and regulation by the end of the year. Dozens of exchange applications are hovering out that are without the proper regulation.
- Following a request from El Salvador, the Central American Bank for Economic Integration will create a technical committee to assist the Central American country in figuring out how to execute its bitcoin laws.
- Argentina’s central bank is looking into a number of fintech companies that are allegedly providing unlawful crypto-related services. The identities of the companies were not revealed by the bank.
- South Africa wants to tighten up regulation of crypto companies and the digital asset sector in general, with its financial authority proposing anti-money laundering regulations and other measures to do so.
- After earlier warming to the idea of utilizing bitcoin as a financial tool, Iranian President Hassan Rouhani states that he wants to regulate cryptocurrency as soon as feasible.
Emmer and the Congressional Blockchain Group are requesting that the IRS revise its guidance on charitable cryptocurrency donations. Tom Emmer has written to the US tax collector again, this time requesting specific instructions on digital assets. After passing the State Senate, a crypto mining bill in New York dies in the Assembly. A measure in New York’s state assembly that would have essentially placed a prohibition on crypto mining operations has died.