The cryptocurrency market is heading for a two-day winning streak, after a surprisingly upbeat tone from the head of the Securities and Exchange Commission (SEC), Jay Clayton, who testified before the U.S Senate’s Banking, Housing, and Urban Affairs Committee.
In his remarks, he reassured the senate the SEC is keeping an eye on digital currencies. Specifically, Initial Coin Offerings (ICOs) are drawing the attention of regulatory agencies. ICOs are similar to an Initial Public Offering (IPO), but digital currency is offered in lieu of traditional stock equities.
ICOs are relatively new and have gone largely unregulated for quite some time. While some investors have seen strong returns on these offerings, a few ICOs have turned out to be fraudulent schemes. Clayton made it clear that ICOs are subject to securities law, and that the SEC would police the currency market. Clayton stated in his remarks “they (investors) are entitled to the benefits of state and federal securities laws and sellers and other market participants must follow these laws.” The SEC’s Cyber Unit has intervened in a number of ICOs already.
The chairman of the Commodity Futures Trading Commission (CFTC), J. Christopher Giancarlo, also spoke during the hearing. Giancarlo is one of the regulatory officials that had approved Bitcoin futures for trading. He assured the senate that his agency would “do no harm” to the cryptocurrency market, and commented on the “paradigm shift” that the market has seen during his testimony. It seems both regulators recognize the potential of blockchain technology, but also the need to have regulations as soon as possible.
The cryptocurrency market reacted well to the comments of the two regulators. In the previous weeks, fears of regulator intervention had caused cryptocurrency values to tumble. Collectively, the crypto market lost about $480 billion in market capitalization during the steep sell off. The news was sufficient to reverse the dip, and Bitcoin surpassed the $7,700 mark on Tuesday. Wednesday was another green day for the cryptocurrency, which trades over $8,200 as of Wednesday evening.
Article By: Frank Marino-Moore