Coinbase to Congress; More Clarity not Regulation Needed
Coinbase spokesman Mike Lempres told a congressional hearing that more regulation would only add to the confusion of the hodgepodge regulatory statues which already exist.
Coinbase Asks for Clarity
The House Financial Committee held a hearing entitled “Examining the Cryptocurrencies and ICO Markets.” yesterday. This was the first hearing that members of Congress specifically addressed the crypto market as reported by Forbes.
Paramount to the hearings, mandate was to examine existing regulation of the markets and establish whether there is sufficient oversight. Among those invited to testify was Mike Lempres ,chief legal and risk officer for the San Francisco based exchange Coinbase.
Lembres took the position that there is no need for further regulation but a dire need for clarification of the regulatory bodies in charge now. Pointing out that Coinbase is subject to numerous regulators at the state level including the SEC, the Commodity Futures Trading Commission, the Federal Trade Commission and the Financial Crimes Enforcement Network in addition to meeting the different licensing requirements in 38 states.
Lambres went on to chart the confusion between meeting regulations by saying.
“Today’s environment calls to mind the parable of the blind mice and the elephant – each agency looks at tokens from its own narrow perspective: the SEC says these assets, particularly ICO’s, are probably securities; the CFTC says tokens are commodities, unless they are securities; the IRS says they are property; FinCEN says tokens are money; and other agencies see tokens through their own lens.”
Lambert went on to explain that Coinbase only trades four currencies (Bitcoin, Bitcoin Cash, Ethereum and Litecoin) because they have all be solidly determined to be currency and not securities.
“We are studiously avoiding listing tokens that could be determined to be securities because we are not currently licensed to trade securities and cannot take the risk of inadvertently trading an asset that is later found to be a security,” he said.
Congressional Voices For and Against.
The most outspoken critic of the cryptocurrency market was Democratic Rep. from California Brad Sherman who summed up all of the complexity of Bitcoin and like currency as ‘a scam’.
He went on to paint a picture of traders sitting around in their pajamas with dreams of becoming overnight millionaires. Also of terrorists and criminals sending money around the world to fuel their empires. Near the end relenting to say that perhaps one percent of the time a useful business comes out of it.
To balance that Rep. Tom Emmer, a member of the congressional blockchain caucus, said that the innovation from blockchain technology happening in America is something both democrats and republicans should get behind; “I hear elected officials who don’t have any concept of what we’re dealing with here and how exciting it is, talking about how we got to regulate and create more government infrastructure.”