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Jay Clayton, the SEC Chairman, was bombarded with letters from the members of Congress to give them a clear picture about the regulations on cryptocurrencies. The Congress members feel that the chairman should be more clear and vocal about the cryptocurrency regulations.
The majority portion of the cryptocurrencies are treated in the same manner as stocks. However, the agency made it a point to clarify that both Ethereum and Bitcoin are commodities and are under CFTC regulations. But, for the several other cryptocurrencies that are created using the initial coin offering, there is the Howey Test.
The chairman went ahead and made it clear that he has no intentions of updating the regulations and standards by which crypto is measured. The SEC, being an independent body, can certainly explain the existing laws; however, it can’t change the laws without the Congress being involved.
Concerns regarding how the stakeholders from the cryptocurrency world could flee to a foreign land was broadcast broadly in the news. It also said that the uncertainties about the sales and offers of cryptocurrencies can be damaging to the United States of America. That could be the reason why the U.S. ends up losing its future business transactions with others. Congress members want clarity on the SEC’s regulations regarding cryptocurrencies.
After a meeting that lasted for four hours this week and was attended by Wall Street representatives, venture capital firms, and other cryptocurrency agencies – the letter was finally sent. It clearly stated how everyone wanted an order in the market and stated the importance of transparent regulations.
The chief policy officer, Mike Lempers feels that it is time to change the way things were done in the past. The lawmakers disapproved the whole concept of punishment to clarify what their views were.
Using punishment will not solve the matters in hand, however formal guidance seems to be a perfect way of clearing all the uncertainties that lie ahead. Though, Congress members haven’t mentioned a cleared deadline, they urge the SEC Chairman to provide a quick response.
Congress requested to clarify when and under what circumstances should cryptocurrencies be treated as investment contracts. The letter also asked to elaborate on what Mr Hinman said about the non-security of digital tokens even though they are sold as investment contract. Congress Members would also like to know about the tools that SEC uses or is willing to use to set up more justified and understandable guidance on the whole matter.