Congress considering cryptocurrency isn’t something new – we’ve seen the US Congress’ interest in cryptocurrency before. But regarding price, this is something new! Bipartisan bills have been introduced to help prevent crypto price manipulation and boost acceptance of blockchain technology.
The representatives who have forwarded the latest bills are Darren Soto (D) and Ted Budd (R). They announced jointly their two bills: “The Virtual Currency Consumer Protection Act of 2018” and the “U.S. Virtual Currency Market and Regulatory Competitiveness Act of 2018”. According to the two representatives, the bills are aimed at making the US a “leader in the cryptocurrency industry.”
To paraphrase, the bills would ask the Commodity Futures Trading Commission (CFTC) and other US financial regulators to establish a roadmap to better regulate cryptocurrencies with consumer, individual, and business protections in mind.
The first bill seeks out ways to prevent crypto price manipulation. It would empower an organization to research how those manipulations take place, the economic impact it has on investors, and find solutions to prevent price manipulation via regulatory changes, and most importantly, protect investors.
This bill seems to be motivated in part by the New York Office of the Attorney General’s report in September that found that many cryptocurrency exchanges are vulnerable to market manipulation. “The industry has yet to implement serious market surveillance capacities, akin to those of traditional trading venues, to detect and punish suspicious trading activity,” the reported remarked at the time. We’ve covered how Jay Clayton feels the same way.
The US Department of Justice is also looking into crypto market manipulation. The most well-known example of their investigation is on Bitfinex and Tether Ltd., and whether or not Tether was used to support Bitcoin’s price and was responsible for the parabolic Bull Run it experienced in 2017.
The second bill asks regulators to carry out research on crypto regulations in jurisdictions around the world where legislators have pushed more aggressively than the US has. It also empowers the regulators to make recommendations for any legislative changes that would promote the growth of adoption of cryptocurrencies in the US.
It further asks for regulators to clarify whether or not cryptocurrencies and virtual currencies qualify as commodities. The bill also suggests a new, optional regulatory structure specifically for crypto exchanges which would include federal licensing, market supervision, and consumer protection.
Soto and Budd jointly said that “Virtual currencies and the underlying blockchain technology has a profound potential to be a driver of economic growth.”
They further stated:
“That’s why we must ensure that the United States is at the forefront of protecting consumers and the financial well-being of virtual currency investors, while also promoting an environment of innovation to maximize the potential of these technological advances. This bill will provide data on how Congress can best mitigate these risks while propelling development that benefits our economy.”
There has been a major push for legislative solutions for cryptocurrency in the United States. Most recently, Ohio allowed businesses to pay their taxes in Bitcoin.
Clearly, even with this gigantic bear watching and guiding the cryptocurrency market, there’s many reasons to be bullish. We’ve got banks wanting to get into the space. We’ve got Bakkt coming in 2019. We’ve got crypto-friendly legislation pending in the United States. Where will you be when the ball drops and the next bull run hits cryptocurrency? Let us know on our Facebook page!
