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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.
Regulating virtual currency makes about as much sense as regulating Flooz Dollars.
Because it's soooo easy to buy and deal with Bitcoin currently...
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.
-- Tigger warning: This post may contain tiggers! --
*Now referred to as bespoke securities so as to skirt around market valuation requirements.
Have gnu, will travel.
If people really want to screw with regulators, then they should start investing in highly volatile real currencies. Turkish Lira, South African Real, Colombian Peso.
You get the same volatility, the same amssive gains and losses.
All the benefits of Cryptocurrencies, but with none of the legal-greyness.
>> X Regulators To Back More Oversight of Y
C'mon editors, this is "dog bites man". "Man bites dog" would be a regulator who wants a smaller kingdom.
Why have a debate about which agency? Why not let all interested agencies regulate? Limiting regulation to a single agency could lead to (1) less regulation, and (2) lack of conflicting regulations. Although, I suppose, that (2) is possible even with a single agency doing the regulation.
I'll see your senator, and I'll raise you two judges.
Bu, bu, but . . . big ISPs are getting deregulation.
Big banks that scammed consumers are getting deregulation and/or tax breaks.
I'll see your senator, and I'll raise you two judges.
Sell?
Where's your Trump now, hm?
People are mortgaging their homes to buy it
No they aren't
"When life gives you lemons, don't make lemonade. Make life take the lemons back!" -- Cave Johnson
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.
Translation: "We need to figure out how cryptos can't be a real choice vis-a-vis fiat money, because our pals in the 'financial system' need to keep control of your money and skim constantly off your money and have taxpayers pick up their horrible bets with our money. And if you a choice with money that might be a problem so we'll 'fix' that real fast."
Remember it will all be done for our 'safety' etc.
Because if there are two agencies regulating crypto as two different things (say, securities vs currency), then any defendent will use that in court to undermine the authority of the regulator.
Not necessarily. It might be illegal to - say - buy BTC on a foreign exchange. That doesn't stop me from skirting one regulation while following the important ones (like taxes).
Strongly disagree about crypto being a "fad". But regulation is an extremely BAD idea at this point, because
(1) A major force behind the excitement for crypto is that "regulation" is flawwed and does more harm than good - that is the motivating force behind crypto AND the source of all the interest - Trust nobody, not even governments --- this is proven time and time again, despite peoples' best intentions ---- rules of the system are mathematical and determined by the consensus-based governance system, AND users knowing this voluntarily have the right to put their value or efforts into a system with particular regulations -- which is No regulations, except the cryptography.
(2) Regulation kill potential innovation; because the filling of unforseeable needs will be hindered. There's a chance the way you understand crypto right now causes regulations to be written such a way that stops crypto from throwing away what it is today and evolving and adapting to a completely new paradigm.
(3) This space is young and deserves a chance for technologists and researchers to learn through experiment --- regulators know next to zero about and future potential and technology ideas that have not been tried yet, and have zero business playing with regulations before they even understand that a persistent material problem exists AND they need to deal with it AND it's even THEIR job to deal with it.... the best ideas have likely not been expressed and experimented with yet, and may not come for decades. Don't assume that just because Bitcoin has issue X, that this issue is inherent to the exchange of cryptocurrency.
(4) Regulation moves too slowly, and regulators have no way of adapting as fast as changes in technology ---- they should be having years of collaboration with technologists before they learn enough to even begin to see what is sensible regarding regulation.
Yes they are.
Here in Europe, too: I actually know someone who tried to mortgage his home to buy bitcoin, but was fortunately talked out of it by the bank employee.
O, and then there's the famous bitcoin family who sold everything they own to buy bitcoin. They are living at a camp site.
All of those were in december, of course, right before the peak...
They are debating what agency gets to regulate it under current laws. Basically CFTC and SEC discussing how they see cypto and current securities law.
Probably none of the above..... Bitcoins are not security exchanges, AND they are not commodities contract exchanges, that is unless you're talking about those futures --- they're "Spot" exchanges or places of "Barter"; that is entities where you deposit your X or Y, and you receive trading tokens denoted in what you deposited that you can trade and then withdraw your X or Y.
And X or Y is either a Virtual currency value to/from a digital wallet or a Fiat currency value to/from a bank account.
Spot exchanges are rare, but I guess one of the largest and well-known would be eBay, where sellers list a physical good and a buyer wins the auction, then agrees to money they put down and receive the good.
Spot exchanges don't really require any 3rd party regulation, since buyers and sellers are directly swapping the end things of value, not contracts or securities --- virtual currencies are more standardized, so it's even easier for a virtual currency exchange to prevent fraud than it is for eBay to do.
The additional concerns are mainly security in handling the systems; KYC/AML issues, and ensuring exchanges don't do deceptive things like fractional reserve -- or take assets from customer accounts and do their own trades, possibly resulting in losses, or the exchange having less fiat or crypto X than the aggregate of that in their customers' accounts.
While everyone is running around calling it crypto-currency It's all just varying uses of a blockchain to validate a transaction or ownership while remaining anonymous and not requiring a central agency/server. I still don't fully understand it but almost every big player in web services (IBM, Microsoft, Amazon) is now offering blockchain services to track and verify inventory. Yes banks and those shadow governments that control everything behind the scenes detest the idea that some of their control is being wrested away so you can bet they will fight to either extinguish (unlikely) or control through legislation the use of the technology. But ultimately the way the tech works means legislators will be playing whack-o-mole as new blockchains are created faster than legislation can be written let alone voted into law.
"A person is smart. People are dumb, panicky dangerous animals and you know it." - K
If people really want to screw with regulators, then they should start investing in highly volatile real currencies. Turkish Lira, South African Real, Colombian Peso.
You get the same volatility, the same amssive gains and losses. All the benefits of Cryptocurrencies, but with none of the legal-greyness.
If you knew what you were talking about you wouldn't have goofed like that.
I'm a minority race. Save your vitriol for white people.
Crypto currencies have proven incredibly useful on the black market. They've been useful in facilitating the purchase of Drugs, Money Laundering, prostitution and all manner of illegal transactions. That stuff's not going away. Drugs and prostitution are likely to stay illegal and there's always room for money laundering. Ransomeware's still out there too. These things will continue to form a bedrock for the exchanges to run off of.
Now, if you could get drugs & prostitution legalized that would be a huge blow. Crack down on Ransomeware & money laundering and they bottom would drop out. But there's widespread support for all those things (debatable about money laundering I suppose) and nothing seem to be happening. There are other forces at play.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
Ignoring regulators is one reason Bitcoin created. We'll get to see if it actually works in practice.
Bitcoin itself will not be regulated. Exchanges that convert between real currencies (USD, Euro, etc) and bitcoin will be regulated.
The transfer of bitcoins from one bitcoin account/address to another bitcoin account/address remains, by design, beyond government control. As is the decision by the recipient to give the sender a pizza or something. This is essentially a barter transaction, which is taxable so there is government involvement but not government control up front.
Now will people/merchants do their accounting in bitcoin, pay their suppliers in bitcoin, price things in bitcoin natively? Doubtful, these things will most certainly remain in real currencies for anything beyond publicity stunts. So the ability to easily convert between bitcoin and a real currency is essential to commerce involving bitcoin, so government can certainly interfere with bitcoin's use in commerce. However bitcoin is not really used in commerce, merchants who do accept bitcoins are generally doing all accounting and pricing in a real currency and provide a real-time conversion to bitcoin at the moment they provide a bitcoin payment address. Actually a 3rd party payment processor is likely to this, the merchant themselves will likely never see or touch a bitcoin. The payment process will convert from bitcoin to real currency and credit the merchant. Bitcoin is primarily used as a speculative investment vehicle, in past years mostly by nerdy true believers and in recent months by wall street speculators and general pubic speculators. Government regulations can impact this use case but probably to a lesser degree than commerce.
5) How do you enforce it? Worst case, people use VPNs. The government may be able to make examples of some low-hanging fruit, but the US doesn't have a Great Firewall, so all people do is just use TOR for their transactions, have the apps do a different function (for plausible deniability), and have some form of stego or PhonebookFS like storage of wallets, so if it is asked, one just gives up the partition showing the pr0n stash, and that's that.
Ultimately, crypto is math, and it is tough to ban math...
Strongly disagree about crypto being a "fad".
Why? I mean once the dust settles and it's a nice steady currency then what will be the point? What will you be able to do that you couldn't do before?
No sig today...
I think most crypto currency creators would like some sort of regulation. The big question is what kind of regulation do you want and who are you going to regulate. It's not as if there is any central authority to most crypto currencies. So maybe the original creators of a currency might fill something out, or a currency like Tether might have a way of proving that they have assets backing their currency. But something like bitcoin? We don't even know who the creators were.
Flooz lasted from Feb 1999 to Aug 2001, and was so obscure 99% of the population has never heard of it. I myself barely remember hearing about it.
I used Flooz to buy a CueCat scanner to scan my grocery list, and then groceries.com delivered my salad in a van!
I'm bullish on cryptocurrency, and plan to sell some of my stock portfolio to buy more BitCoin.
**looks at stock portfolio today**
OK, never mind. Maybe I'll sell my collection of 10 Beanie Babies, which by now must be worth several million dollars.
You are welcome on my lawn.
wrong, and communication between your server and a foreign one can fall under law. Already laws for fraud and terrorism can be invoked to inspect or seize your server, and more can be created.
I still have my que cat and yes it still reads the barcodes on my printed media library where I have everything random filed. I also still have 2 bit coins, one I bought for about $5 and one my GF gave to me. I will probably keep the unless they top 2000 again. I did buy and sell several others over the course of the last 18 months.
errr....umm...*whooosh* *whoosh* Is this thing on ?
If people really want to screw with regulators, then they should start investing in highly volatile real currencies. Turkish Lira, South African Real, Colombian Peso.
You get the same volatility, the same amssive gains and losses.
All the benefits of Cryptocurrencies, but with none of the legal-greyness.
What makes national currencies flaky in some cases is rampant inflation caused by the central bank printing uncontrolled amounts of lira, pesos, etc. This does not happen with cryptocurrencies.
5) How do you enforce it? Worst case, people use VPNs.
You go after businesses providing services pertinent to adoption --- mainly you create burdensome rules that make it even harder to have an exchange, or take or process vcurrency-based payments
With a US$243.4 billion (as of 29 December 2017) market capitalization, Bitcoin weights 0.13% of US GDP. Is that a threat to the economy? We could talk about US student debt instead...
1) " Trust nobody"
Except the people who run the crypto currency, like bitcoin which is being run very badly and lightning which doesn't really exist yet.
Do you know who all the players in any given crypto-currency are? Do you really trust them more than the government .
So far as I'm concerned cyrpto currencies deserve to die, the people that created them have shown nothing but greed and complete disdain for the environment. They could of tried to come up with solutions to lessen the amount of electricity needed to create crypto-currencies but they haven't, so fuck them, their currencies should die.
Waterfox - a Firefox fork with legacy extension support, security updates and better privacy by default.
Except the people who run the crypto currency, like bitcoin which is being run very badly and lightning which doesn't really exist yet.
That is just your personal opinion -- the network does not agree with you that Bitcoin is being "run badly".
Lightning is currently a TestNet technology that already has all the necessary capabilities in the Bitcoin network itself to be developed on top of BTC.
Do you know who all the players in any given crypto-currency are? Do you really trust them more than the government .
No, and Yes. Remember the players have to come to consensus on each change --- they will only implement revisions to the rules that the network can agree upon, with all actors protecting their own interests.
the people that created them have shown nothing but greed and complete disdain for the environment. They could of tried to come up with solutions to lessen the amount of electricity needed
Now you're just bullshitting...... in most cases the creators haven't even profited significantly or don't expect to.
The technology doesn't require, nor does it consume unreasonable amounts of electricity.
The early developers look upon centralized mining with great disdain ----- that was never meant to happen; Litecoin was the first major AltCoin and was created with a major focus of ending ASIC mining, although that goal was not achieved - Monero and the CryptoNight algorithm have achieved thus.
Some blockchains have come up with "Proof of Stake" and "Proof of Stack Velocity (POsV)", But those have a bigger problem in that they encourage coin hoarding even moreso than mining does, which is undesirable economically.
I expect in the future we'll later see crypto that distributes the initial coins more "fairly" and evenly among ALL its early users -- instead of concentrating them in a small number of Miners with GPUs or ASICs and Stackers with large stashes, and has functions such as "burning % of coins" network-wide on a regular basis to induce churn, discourage hoarding, and control the circulating supplies to reduce volatility.
These are all functions that can be automated with no government involvement (Eventually, with enough testing, hard work and further development) --- and agreed upon by consensus By whichever users decide to join that community.