A US congressional hearing on Initial Coin Offerings (ICOs) was held just this Wednesday, 14th March, 2018 and it was a mixed bag of various views and thoughts.
For one, congress believes that it is its responsibility to protect the US investor as reiterated by Rep. Randy Hultgren when during the hearing he said “congress has a responsibility to ensure that investors are protected without unduly preventing growth.”
This was a Securities and Investment Subcommittee hearing under the larger umbrella of the House Capital Markets which drew a mixed bag of political, academic and industry persons. The hearing revealed divergent viewpoints held by the various members of congress present.
As has been characteristics of such hearings in the past, the US lawmakers struck both supportive and cautionary tones about ICOs and cryptocurrencies in general. For one, Rep. Tom Emmer who was at a Blockchain event last week stated that the industry constitutes a huge topic which required in-depth and long discussions to be able to somewhat grasp its potential to transform.
In general, most of the Reps present committed to striking a balance between regulation to protect investors’ funds and the creation of a framework that encourages innovation in the space. A lot of questions centered on the current regulations about ICOs and cryptos in the U.S today. Mike Lempres, Chief Legal Risk officer for Coinbase was present at the hearing and a lot of the questions were directed at him. Lempres advocated for a balanced approach to regulation in the space in order for the U.S to not miss out or be left behind in an era of Blockchain innovation.
Democrat Representative Member of the committee Carolyn Maloney explained that she is currently working on a bill to oversee cryptocurrencies exchanges. Michigan Rep. Bill Huizenga who is also the Chairman of the Capital Markets, Securities and Investment subcommittee indicated that they will soon enact some clear regulations. “This panel is not going to sit by idly with a lack of protection for investors” he said.
In the state of Minnesota, there has been high interest in the matter of cryptocurrencies and ICOs such that the Rep. Keith Ellison said that “in my meetings with constituents over the last several months, I’ve had many of them say ‘Hey, what’s going on with this cryptocurrency, should I get into it?’” He is of the view that when regulations are drafted, it should be simplified so much so that the unsophisticated investor is able to understand it easily.
Less Regulation, Not More…
Rep. Tom Emmer believes that the needs to be less regulation in order not to stifle innovation in the space. Rep. Emmer is member of the Congressional Blockchain Caucus. “I find myself maybe not with my colleagues on some of this… I hear elected officials who don’t have any concept of what we’re doing here talking about ‘we have to go in and regulate.’”
Rep. Emmer believes that blockchain has proven to help open up capital access and that Republicans and democrats should be able to work together on this to regulate favorable in order to keep American enterprises competitive in the blockchain industry.
“I realize there has to be some regulation, but it’s the balance… and I’ve not heard from the panel. We have regulations in place, but we just need clarity” he adds.
Overall, there was a sense that the panel wanted to strike a balance between regulation and innovation and made clear by Rep. Ted Budd who says the U.S. has to get the oversight regulation right in order not to miss out;
“Regulation in this space is something that the U.S. has to get right because poor or rushed policy in cryptocurrencies really threatens our reputation in finance and technology.”
It is expected that several other meetings of the committee and hopefully, there will be clearer and more informed deliberations going forward.