Senate Cryptocurrency Hearing: Speakers Urge Pragmatic Regulation
- Daniel Gorfine of the CFTC warned against being hasty in defining tokens.

The US government held its second official hearing on the subject of cryptocurrency regulation yesterday.
Specifically, the House Committee on Agriculture heard from a number of individuals from various fields pertaining to the industry.
"It's important that we're not hasty"
Scott Kupor, Managing Partner of Andreessen Horowitz, a California-based venture capital company, said that he believes that the definition of a crypto-asset depends on its stage of development. An ICO looks like a traditional investment and is thus closest to being a security, but once the tokens are live they begin to look like assets and should be regulated by the CFTC.
She said that a digital US dollar could be as well regarded as the fiat dollar is today, and to this end, reference should be taken from the "anonymous, censorship-resistant features of open blockchain currencies" when designing it.
She said that the US elections should not be on a blockchain, because blockchain voting is a complex problem of computer/human coordination. As it stands the relatively simple computer system used in American elections has already being hacked.
Daniel Gorfine, Chief Innovation Officer of the Commodity Futures Trading Commission and Director of the watchdog's fintech initiative LabCFTC, indicated that he believes in cautious regulation. He said that ICO money raising bears many hallmarks of a security and the SEC is looking into that, but the fact that commodities can now be represented as tokens means that these tokens should be regulated by the CFTC.
"It's important that we're not hasty in figuring out what the contours are of applying securities law and then the commodities framework," he said.
His comments echo those of CFTC chairman J. Christopher Giancarlo who won the admiration of the cryptocurrency community by expressing some enthusiasm for cryptocurrency at an earlier government hearing in February 2018.
Lowell Ness, Managing Partner of the Palo Alto office of Perkins Coie, a Seattle-based law firm, said: "One of the things I get asked a lot is, why don't we just call these things securities?... The problem with that is they exhibit some characteristics of securities in certain phases and not in others."
"We need to come up with a fairly novel and pragmatic approach," he said.
Gary Gensler, Senior Lecturer at MIT Sloan School of Management, asked those attending to raise their hands if they had invested in cryptocurrency, and found that around half had.
Gensler asking the committee and the audience how many of them have invested in Cryptocurrency. One committee member raises his hand, half of the audience raises their hand... Amazing ;)... #CryptoCongress
— CryptoKea (@CryptoKea) July 18, 2018
He said that he has found that cryptocurrency investment does not follow traditional political/economic/professional lines at all.
On the subject of regulation, he said that if the US drives off investors, it will be very difficult to bring them back.
A positive tone
Overall, the meeting had a positive tone. All of the speakers agreed that cryptocurrency has a place in the future of the economy and should be regulated, and all agreed that it is important for the regulation to be appropriate.
Cryptocurrency prices do not seem to have reacted at all to this positive development. This is a contrast to the aforementioned February hearing, which caused prices to jump.
Guy Hirsch, US Managing Director of eToro, commented on the hearing: "Today’s hearings are a great step in the right direction. We encourage regulators to hear more from good actors and companies with an international presence since they would be valuable to this discussion in Congress.... Any law that Congress will pass affecting Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the networks which are used to authenticate blockchain technology. Cryptocurrencies can be thought of as systems that accept online payments which are denoted as “tokens.” Tokens are represented as internal ledger entries in blockchain technology while the term crypto is used to depict cryptographic methods and encryption algorithms such as public-private key pairs, various hashing functions, and an elliptical curve. Every cryptocurrency transaction that occurs is logged in a web-based ledger with blockchain technology.These then must be approved by a disparate network of individual nodes (computers that maintain a copy of the ledger). For every new block generated, the block must first be authenticated and confirmed ‘approved’ by each node, which makes forging the transactional history of cryptocurrencies nearly impossible. The World’s First CryptoBitcoin became the first blockchain-based cryptocurrency and to this day is still the most demanded cryptocurrency and the most valued. Bitcoin still contributes the majority of the overall cryptocurrency market volume, though several other cryptos have grown in popularity in recent years.Indeed, out of the wake of Bitcoin, iterations of Bitcoin became prevalent which resulted in a multitude of newly created or cloned cryptocurrencies. Contending cryptocurrencies that emerged after Bitcoin’s success is referred to as ‘altcoins’ and they refer to cryptocurrencies such as Bitcoin, Peercoin, Namecoin, Ethereum, Ripple, Stellar, and Dash. Cryptocurrencies promise a wide range of technological innovations that have yet to be structured into being. Simplified payments between two parties without the need for a middle man is one aspect while leveraging blockchain technology to minimize transaction and processing fees for banks is another. Of course, cryptocurrencies have their disadvantages too. This includes issues of tax evasion, money laundering, and other illicit online activities where anonymity is a dire ingredient in solicitous and fraudulent activities. By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the networks which are used to authenticate blockchain technology. Cryptocurrencies can be thought of as systems that accept online payments which are denoted as “tokens.” Tokens are represented as internal ledger entries in blockchain technology while the term crypto is used to depict cryptographic methods and encryption algorithms such as public-private key pairs, various hashing functions, and an elliptical curve. Every cryptocurrency transaction that occurs is logged in a web-based ledger with blockchain technology.These then must be approved by a disparate network of individual nodes (computers that maintain a copy of the ledger). For every new block generated, the block must first be authenticated and confirmed ‘approved’ by each node, which makes forging the transactional history of cryptocurrencies nearly impossible. The World’s First CryptoBitcoin became the first blockchain-based cryptocurrency and to this day is still the most demanded cryptocurrency and the most valued. Bitcoin still contributes the majority of the overall cryptocurrency market volume, though several other cryptos have grown in popularity in recent years.Indeed, out of the wake of Bitcoin, iterations of Bitcoin became prevalent which resulted in a multitude of newly created or cloned cryptocurrencies. Contending cryptocurrencies that emerged after Bitcoin’s success is referred to as ‘altcoins’ and they refer to cryptocurrencies such as Bitcoin, Peercoin, Namecoin, Ethereum, Ripple, Stellar, and Dash. Cryptocurrencies promise a wide range of technological innovations that have yet to be structured into being. Simplified payments between two parties without the need for a middle man is one aspect while leveraging blockchain technology to minimize transaction and processing fees for banks is another. Of course, cryptocurrencies have their disadvantages too. This includes issues of tax evasion, money laundering, and other illicit online activities where anonymity is a dire ingredient in solicitous and fraudulent activities. Read this Term will have global impact on foreign companies that are doing business in the US or want to enter the US market and therefore it is important for US lawmakers to facilitate dialogue with other nations on this matter."
The fact that #cryptocurrency is being discussed by US Congress is a positive for the future of #cryptocurrency not minding what resolution they come up with, they have helped increase awareness about cryptocurrency. Time for #advocates to drive in adoptions #CryptoCongress
— Awosika Israel Ayodeji (@Ebunayo08) July 18, 2018
The US government held its second official hearing on the subject of cryptocurrency regulation yesterday.
Specifically, the House Committee on Agriculture heard from a number of individuals from various fields pertaining to the industry.
"It's important that we're not hasty"
Scott Kupor, Managing Partner of Andreessen Horowitz, a California-based venture capital company, said that he believes that the definition of a crypto-asset depends on its stage of development. An ICO looks like a traditional investment and is thus closest to being a security, but once the tokens are live they begin to look like assets and should be regulated by the CFTC.
She said that a digital US dollar could be as well regarded as the fiat dollar is today, and to this end, reference should be taken from the "anonymous, censorship-resistant features of open blockchain currencies" when designing it.
She said that the US elections should not be on a blockchain, because blockchain voting is a complex problem of computer/human coordination. As it stands the relatively simple computer system used in American elections has already being hacked.
Daniel Gorfine, Chief Innovation Officer of the Commodity Futures Trading Commission and Director of the watchdog's fintech initiative LabCFTC, indicated that he believes in cautious regulation. He said that ICO money raising bears many hallmarks of a security and the SEC is looking into that, but the fact that commodities can now be represented as tokens means that these tokens should be regulated by the CFTC.
"It's important that we're not hasty in figuring out what the contours are of applying securities law and then the commodities framework," he said.
His comments echo those of CFTC chairman J. Christopher Giancarlo who won the admiration of the cryptocurrency community by expressing some enthusiasm for cryptocurrency at an earlier government hearing in February 2018.
Lowell Ness, Managing Partner of the Palo Alto office of Perkins Coie, a Seattle-based law firm, said: "One of the things I get asked a lot is, why don't we just call these things securities?... The problem with that is they exhibit some characteristics of securities in certain phases and not in others."
"We need to come up with a fairly novel and pragmatic approach," he said.
Gary Gensler, Senior Lecturer at MIT Sloan School of Management, asked those attending to raise their hands if they had invested in cryptocurrency, and found that around half had.
Gensler asking the committee and the audience how many of them have invested in Cryptocurrency. One committee member raises his hand, half of the audience raises their hand... Amazing ;)... #CryptoCongress
— CryptoKea (@CryptoKea) July 18, 2018
He said that he has found that cryptocurrency investment does not follow traditional political/economic/professional lines at all.
On the subject of regulation, he said that if the US drives off investors, it will be very difficult to bring them back.
A positive tone
Overall, the meeting had a positive tone. All of the speakers agreed that cryptocurrency has a place in the future of the economy and should be regulated, and all agreed that it is important for the regulation to be appropriate.
Cryptocurrency prices do not seem to have reacted at all to this positive development. This is a contrast to the aforementioned February hearing, which caused prices to jump.
Guy Hirsch, US Managing Director of eToro, commented on the hearing: "Today’s hearings are a great step in the right direction. We encourage regulators to hear more from good actors and companies with an international presence since they would be valuable to this discussion in Congress.... Any law that Congress will pass affecting Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the networks which are used to authenticate blockchain technology. Cryptocurrencies can be thought of as systems that accept online payments which are denoted as “tokens.” Tokens are represented as internal ledger entries in blockchain technology while the term crypto is used to depict cryptographic methods and encryption algorithms such as public-private key pairs, various hashing functions, and an elliptical curve. Every cryptocurrency transaction that occurs is logged in a web-based ledger with blockchain technology.These then must be approved by a disparate network of individual nodes (computers that maintain a copy of the ledger). For every new block generated, the block must first be authenticated and confirmed ‘approved’ by each node, which makes forging the transactional history of cryptocurrencies nearly impossible. The World’s First CryptoBitcoin became the first blockchain-based cryptocurrency and to this day is still the most demanded cryptocurrency and the most valued. Bitcoin still contributes the majority of the overall cryptocurrency market volume, though several other cryptos have grown in popularity in recent years.Indeed, out of the wake of Bitcoin, iterations of Bitcoin became prevalent which resulted in a multitude of newly created or cloned cryptocurrencies. Contending cryptocurrencies that emerged after Bitcoin’s success is referred to as ‘altcoins’ and they refer to cryptocurrencies such as Bitcoin, Peercoin, Namecoin, Ethereum, Ripple, Stellar, and Dash. Cryptocurrencies promise a wide range of technological innovations that have yet to be structured into being. Simplified payments between two parties without the need for a middle man is one aspect while leveraging blockchain technology to minimize transaction and processing fees for banks is another. Of course, cryptocurrencies have their disadvantages too. This includes issues of tax evasion, money laundering, and other illicit online activities where anonymity is a dire ingredient in solicitous and fraudulent activities. By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the networks which are used to authenticate blockchain technology. Cryptocurrencies can be thought of as systems that accept online payments which are denoted as “tokens.” Tokens are represented as internal ledger entries in blockchain technology while the term crypto is used to depict cryptographic methods and encryption algorithms such as public-private key pairs, various hashing functions, and an elliptical curve. Every cryptocurrency transaction that occurs is logged in a web-based ledger with blockchain technology.These then must be approved by a disparate network of individual nodes (computers that maintain a copy of the ledger). For every new block generated, the block must first be authenticated and confirmed ‘approved’ by each node, which makes forging the transactional history of cryptocurrencies nearly impossible. The World’s First CryptoBitcoin became the first blockchain-based cryptocurrency and to this day is still the most demanded cryptocurrency and the most valued. Bitcoin still contributes the majority of the overall cryptocurrency market volume, though several other cryptos have grown in popularity in recent years.Indeed, out of the wake of Bitcoin, iterations of Bitcoin became prevalent which resulted in a multitude of newly created or cloned cryptocurrencies. Contending cryptocurrencies that emerged after Bitcoin’s success is referred to as ‘altcoins’ and they refer to cryptocurrencies such as Bitcoin, Peercoin, Namecoin, Ethereum, Ripple, Stellar, and Dash. Cryptocurrencies promise a wide range of technological innovations that have yet to be structured into being. Simplified payments between two parties without the need for a middle man is one aspect while leveraging blockchain technology to minimize transaction and processing fees for banks is another. Of course, cryptocurrencies have their disadvantages too. This includes issues of tax evasion, money laundering, and other illicit online activities where anonymity is a dire ingredient in solicitous and fraudulent activities. Read this Term will have global impact on foreign companies that are doing business in the US or want to enter the US market and therefore it is important for US lawmakers to facilitate dialogue with other nations on this matter."
The fact that #cryptocurrency is being discussed by US Congress is a positive for the future of #cryptocurrency not minding what resolution they come up with, they have helped increase awareness about cryptocurrency. Time for #advocates to drive in adoptions #CryptoCongress
— Awosika Israel Ayodeji (@Ebunayo08) July 18, 2018