Cryptocurrencies: regulating the new economy


The US approach to crypto-industry regulation has been to work within its current laws rather than introduce new ones, as well as shedding light on the risks of those involved in ICOs and in trade .

At the end of 2017, the Securities and Exchange Commission (SEC), the regulator in the United States, issued a warning to investors.

"Numerous concerns have been raised about the cryptocurrency and ICO markets, including the fact that, as they are currently operational, there is investor protection substantially lower than our traditional securities markets, with consequently greater opportunities for fraud and manipulation "the governor said in a statement.

A lot of debates in the United States have been about how to classify cryptocurrencies. At the moment, the SEC states that bitcoins and ether are not titles. The guard dog uses a method called "Howey Test" to decide if something is a security. The ruling comes from a case of the United States Supreme Court of 1946 that classifies security as a cash investment in a joint venture, in which the investor expects profits primarily from the efforts of others.

While bitcoin and ether may not be titles, the SEC said some coins created by ICO could be.

"A token, a digital resource, where I give you my money and you go and make a business, and in exchange for giving you my money I say" you can get a return "which is a security and we settle, "SEC Chairman Jay Clayton told CNBC in an interview at the start of this year. "We regulate the offer of that security and regulate the trade of that security."

Clayton said the SEC will not change the securities laws to satisfy cryptocurrencies. To this end, some founders behind the ICOs of fraud were prosecuted by the SEC. In April 2018, the SEC accused two founders of a cryptocurrency company that was approved by boxing champ Floyd Mayweather, with the implementation of a fraudulent ICO.

But it's not just the ICO markets that US regulators are watching. There has been a recent growing interest from professional institutional investors who want to be involved in the cryptocurrency space. But the lack of regulation and the difficulty in buying crypto-assets on the stock exchange has postponed them. Many believe that the regulations do not offer sufficient protection. So these investors sought traditional financial instruments to help them invest in digital currencies.

One of those products launched last year was the future of bitcoins. Both the CME and the CBOE launched futures last year. This is a product that tracks the price of bitcoins but investors are not actually buying any digital currency. Theoretically allows them to shorten, or bet against, bitcoins. So far, futures have been the scope of professional products in the United States

C & # 39; it was also an attempt to market a product known as an ETC (Bitcoin Exchange Traded Fund). An ETF is a title that tracks the price of an asset, in this case bitcoin, and is quoted on a stock exchange. The biggest supporters of a bitcoin ETF in the United States are Cameron and Tyler Winklevoss, founders of Crypto exchange Gemini. They tried twice to get a list of bitcoin ETFs, but they were scaled both times by the SEC.

Bitcoin investors are currently waiting and see the way in the United States about the next steps of the SEC.

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