A pair of United States Congressmen are at the forefront of efforts to improve the cryptocurrency regulatory paradigm in the country. Stakeholders from lawmakers to investors say the country needs to act fast or risk falling behind Europe and Asia in the race to dominate the landscape of the emerging digital economy.
Bipartisan Efforts to Firm up Crypto Regulations
According to The National Law Review, U.S. Congressmen Bonnie Watson Coleman (D-NJ) and Ted Budd (R-NC) introduced two new bills to the House of Representatives. The proposed bills H.R. 922 and H.R. 923 seek to firm up different aspects of the country’s cryptocurrency regulatory paradigm.
The first bill, H.R. 922 or “The Virtual Currency Consumer Protection Act of 2019,” examines the possibility of price manipulation within the industry. The proposed legislation mandates the chairman of the U.S. Commodity Futures Trading Commission (CFTC) to investigate and report the existence of wash trading and other forms of market manipulation to select House and Senate committees within a year of the bill’s passage.
Since 2018, both the CFTC and the U.S. Department of Justice (DOJ) have launched a separate investigation into suspected spoofing and other trading malpractices in the cryptocurrency market. In March, a report from Bitwise Asset Management also alleged that about 95 percent of Bitcoin trading volume was due to wash trading.
The second bill, H.R. 923 or “The U.S. Virtual Currency Market and Regulatory Competitiveness Act of 2019” proposes a joint effort by the CFTC and the U.S. Securities and Exchange Commission (SEC) to develop modalities that would enhance the country’s competitive edge in the developing cryptocurrency narrative.
Another aspect of the proposed bill calls for regulators to examine the need for a new regulatory structure for blockchain-based assets. According to details of the bill, this new structure will feature already well-established U.S. laws but adapted to the unique attributes of cryptocurrencies.
Balancing Innovation and Regulation
These two proposed bills appear to be part of a larger effort by U.S. lawmakers to improve the degree of regulatory clarity for cryptocurrencies in the country. Back in December 2018, BTCManager reported the introduction of a bill to exempt digital tokens from traditional securities regulation.
Critics of the SEC say that traditional securities laws cannot adequately be applied to digital tokens. Thus, part of the ongoing effort in American Congress appears to be tailored towards standardizing the definition of digital tokens.
Many stakeholders believe that the inability of U.S. regulators to tweak their approach to oversight of the industry could leave the country falling behind others in the emerging digital asset narrative. At the same time, regulators like the CFTC and SEC say investor protection remains the priority when it comes to creating rules for cryptocurrencies.