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US Regulators To Back More Oversight of Virtual Currencies (reuters.com)
Digital currencies such as bitcoin demand increased oversight and may require a new federal regulatory framework, the top U.S. markets regulators will tell lawmakers at a congressional hearing on Tuesday. From a report: Christopher Giancarlo, chairman of the Commodity Futures Trading Commission (CFTC), and Jay Clayton, chairman of the Securities and Exchange Commission (SEC), will provide testimony to the Senate Banking Committee amid growing global concerns over the risks virtual currencies pose to investors and the financial system. Giancarlo and Clayton will say a patchwork of rules for cryptocurrency exchanges may need to be reviewed in favour of a rationalised federal framework, according to prepared testimony published on Monday. Congressional sources told Reuters the hearing will largely be a fact-finding exercise focusing on the powers of the SEC and CFTC to oversee cryptocurrency exchanges, how the watchdogs can protect investors from volatility and fraud, and the risks posed by cyber criminals intent on stealing digital tokens.
Two things that are being looked at are:
1. the higher correlation between cryptocurrency fiat assets and "dirty" money (e.g. crime or terror related sources/uses); and
2. the lack of traceability of cryptocurrency allowing extra-national actors (primarily rogue states like NK, or banned individuals not permitted to participate in fiat exchanges, like Russian/Iranian/etc top execs/politicos) to participate even when supposedly excluded.
Both are risk factors.
Both tie in to the Tulip bubbles that pump up cryptocurrencies to artificial levels.
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