In the wake of growing securities frauds both in the U.S. and abroad, Rep. Bill Huizenga affirmed his intention “to not sit by idly” at a Congressional hearing earlier this year. According to the congressman, the cryptocurrency market is a “muddled and fairly opaque” market. And in order to protect the cryptocurrency investors, this issue needs to be a key focus.
Since he is a contender to lead the House Financial Services Committee, Huizenga promised that he will be making cryptocurrency regulation his crucial agenda if he assumes the office after the midterm elections this year.
Huizenga’s statement was first reported by Bloomberg along with how people were investing their entire life savings into projects that would either never get off the ground or were backed by worthless digital currencies. The cryptocurrency investment arena has been so shady that Christian Catini, an MIT professor recently did an ICO market study and revealed that as much as 85% of all ICO investments have been directed at scams.
To crack down on these scams, the U.S. and Canadian regulatory bodies have accelerated their efforts named “Operation Crypto Sweep” that targets all the companies that are found to not just have been indulging right now, but if they have indulged in the past in “crypto-scams.” Thanks to these efforts, the North American enforcement had already issued cease-and-desist letters to more than 40 local companies.
While that is great news for crypto investors, many government agencies around the world are still finding it hard to regulate cryptocurrencies. These currencies are decentralized and are multifaceted in nature, which allows it to be used as a currency, stock or even commodity. This clearly does not fit the traditional regulation standards that we have in place right now.
Huizenga expressed that exact point, about classifying cryptocurrencies and how would someone go about doing that. US regulators would like to push for a law that would bring bitcoin and other decentralized assets into the categories of stock or currency. But is that the right place for it?
That’s the question that we need to ask.
Other Congressmen have different opinions about it. Rep. Randy Hultgren (R-IL) this year called for a cryptocurrency regulation that protects investors as much as it catalyzes technological innovation. But we tend to agree with Tedd Budd, another Congressman, who argued that instead of rushing these regulations, the U.S. should instead be focusing on getting it right.
And since these cryptocurrencies can be used globally without having to convert in different countries like fiat currency, we agree with Valdis Dombrovskis, European Commission’s Vice President’s proposal of approaching a global crypto regulatory framework. This looks like an appropriate framework that could apply globally for a global cryptocurrency.