The latest US Congressional hearing reveals the future of digital asset regulation in the country.
An agriculture subcommittee heard testimony from Charles Hoskinson, a Chainalysis co-founder, a CFTC official, a law professor, and others regarding regulation and related issues.
At a House of Representatives hearing on regulating digital assets on Thursday, disclosure played a significant role.
Despite being the head of the Commodity Exchanges, Energy, and Credit Subcommittee of the House Agriculture Committee Sean Maloney stated that the debate would concentrate on supervision and regulation gaps for derivatives and the underlying spot markets, although it covered a wide range of topics.
The Agriculture Committee is in charge of the Commodity Futures Trading Commission (CFTC), which, along with the Securities and Exchange Commission, governs the financial markets (SEC).
Jonathan Levin, co-founder and chief strategy officer of Chainalysis, claimed during his evidence that the transparency of cryptocurrencies offers a special window into the markets, including their hazards. The blockchain can provide details about the whole network that supports illegal activity.
Charles Hoskinson, CEO of Input Output Global, discussed “mindset” and underlined the value of values and the necessity to pursue “efficacy over strictness” in the quickly changing, global market. Later, he said that no regulators are currently doing a decent job with Know Your Customer/Anti-Money Laundering measures.
Director of the CFTC Market Oversight Division Vincent McGonagle asserted that his organisation has the expertise to regulate the cryptocurrency cash market as the participants moved on to more detailed inquiries.
There are numerous suggestions to give the CFTC control over that market, which is currently governed by state rules governing money transmission. According to McGonagle, centralised clearing adds an additional layer of consumer protection and the state regulations serve a different purpose than the CFTC’s concerns.
According to McGonagle, digital assets are classified as commodities, but the SEC can decide whether they are securities. McGonagle claims that there is no set mechanism for returning those commodities to the control of the CFTC, and that defining the point at which securities are fully decentralised and free from SEC jurisdiction is a “tangled web”.
The USA is not the only country opting for virtual digital assets regulation. Recently, the Indian Govt. issued 1% TDS guidelines for Virtual Digital Assets.