Daniel Gorfine, the director of CFTC (Commodity Futures Trading Commission) has cautioned Congress while attending the Congressional meeting on Wednesday, against making hasty pronouncements on Crypto regulations.
Exercise Caution In Crypto Regulations
This remark was made while addressing the US House Committee on Agriculture which was seeking to get more information about Cryptocurrencies and digital assets. Some of the individuals accompanying him included Amber Baldet, the former JPMorgan Blockchain lead, Gary Gensler, the former chair of CFTC and Scott Kupor, and the managing partner of A16Z.
These remarks were made by Gorfine as he was trying to put into perspective the fact that many varying things are classified as commodities without all of them attracting stringent attention from the regulators in the United States. He stated that only upon evidence of swaps products and futures on such commodities do the regulators have oversight over them.
Congress’ Duty For The Market
He went on further to state that Congress has a common goal of bringing certainty and clarity to the market, but even in this shared goal, he cautioned that they should be careful in the approach they use lest they fail to steer innovation or limit development in this area. He pointed out that even though this step was taken as a way of establishing clear guidelines regarding Cryptocurrencies and digital coins, making rush regulatory pronouncements will likely fail to achieve this desired outcome but will instead lead to far-reaching unforeseen consequences and fall short in appreciating or capturing the main aspects of new products or models.
Gorfine reiterated this statement throughout the hearing and additionally remarked on the need to, first of all, be sure of the rules applicable to the application of securities laws and after that, on the need to understand the framework of the commodities.
Sentiments Of The Congress
This hearing put in the open the varying sentiments that many members of the Congress hold with respect to the Crypto space. Some of these sentiments were admittedly not positive. An example is Rep. Collin Peterson’s remarks, where he termed the Cryptocurrency space a Ponzi scheme.
On Rep. Collin Peterson question as to what drives
Cryptocurrencies, Gensler responded by pointing out that there was nothing behind gold either, apart from the cultural norms that saw gold be used as a standard of currency, much like the Cryptocurrency ecosystem. He even termed Bitcoin, as essentially the modern gold, it is purely a construct of the society.
Some of the members’ sentiments were simply asking for more information as to how exactly the Crypto space worked. Rep. Rick Allen commented that he knew that Crypto was creating another currency supply but he did not understand fully exactly how it does this.
Michael Conaway’s comment that the use of Bitcoin by criminals will propel it to greater heights was one of the most notable statements made during the hearing. Just a few days prior the department of justice announced that it was able to trace Bitcoin transactions by 12 Russian operatives accused of interfering with the 2016 presidential election.