US Congress and the SEC ready to get serious about crypto?

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US Congress and the SEC ready to get serious about crypto?

Issues surrounding crypto governance will form a part of the next Congressional hearing for Commissioners of the U.S. Securities and Exchange Commission (SEC). Top on the crypto-related agenda will be securities law for virtual currencies and Bitcoin ETFs.

Facebook’s crypto project Libra will also form part of the deliberations during Tuesday’s (September 24, 2019) hearing. Authorities in several jurisdictions have come out to oppose the proposed digital currency over risks to monetary sovereignty.

Crypto and securities regulations

According to the memo from the Committee on Financial Services of the U.S. House of Representatives, there will be hearing on the SEC’s oversight role over the country’s financial market.

Top on the crypto-specific agenda for the hearing is the application of securities law to cryptocurrency tokens. The SEC under its chairman Jay Clayton has consistently maintained that most cryptos are securities.

An excerpt from the memo reads:

“The Federal securities laws apply to securities, including stocks, bonds, and investment contracts, regardless of whether they are digital… If a digital asset meets this test, it is a security and must either register with the SEC or meet an exemption.”

The Commission has continued its clampdown on token sales deemed to be unregistered securities offerings.

As previously reported by Micky, the SEC is suing ICOBox for running an unlicensed sale of tokens deemed to be securities.

And of course, Libra

In keeping with the current hot topic in the crypto space, Libra will also be among the topics to be discussed at the hearing.

Back when the project’s white paper first came out, Committee chair Rep. Maxine Waters (D-CA) was one of the more vocal opponents of the project.

According to the memo, the hearing will seek to establish among other things, whether Libra tokens constitute a security.

Such consideration brings up another regulatory hurdle for the much-maligned stablecoin project.

In the past few days, authorities in Germany and France have called Facebook’s crypto a threat to the monetary sovereignty of nations.

Meanwhile, Libra co-creator says the Association is making efforts to address the concerns raised by numerous regulators.

Bitcoin not ready for mainstream trading

The Committee will also discuss matters relating to Bitcoin ETFs. So far, the SEC is yet to grant approval for any BTC ETF application.

Earlier in the week, Cboe withdrew the VanEck/SolidX ETF proposal.

Speaking during the Delivery Alpha conference organized by CNBC, Clayton remarked that bitcoin will not trade on a mainstream exchange until it is better regulated.

In 2019, platforms like Fidelity and TD Ameritrade have announced plans to debut bitcoin trading services.

Once live, these services could potentially open BTC trading to hundreds of millions of customers, providing broader institutional exposure for cryptos.