Security Or Commodity?
The SEC and CFTC chairmen recently called for greater scrutiny of digital assets before the Senate Banking Committee. Members of the panel said the regulators will return to discuss how to move forward.
While many lawmakers agree tighter oversight is needed, there is no consensus yet in Congress on how to proceed.
While some lawmakers say speculative investments should be classed as securities, others want digital currency transactions regulated as commodities.
The SEC is already cracking down on transactions known as initial coin offerings (ICOs), while the CFTC has identified digital assets as a commodity subject to its anti-fraud rules.
Peter Van Valkenburgh, director of research at the Coin Center, a member of the growing cryptocurrency lobby, said lawmakers need to distinguish between ICOs that operate like securities and other virtual currencies including bitcoin, which he described as a commodity like gold.
Senator Rounds told Reuters there was an opportunity to regulate cryptocurrencies as both a security and a commodity.
But while lawmakers are keen to mitigate the risks digital assets may pose, they are also mindful of the need to protect innovation, including the underlying distributed ledger technology, said Democratic Senator Chris Van Hollen, a member of the Senate Banking Committee.
"The goal here is to have rules of the road that protect consumers without trying to squash innovation."
This article was provided by Reuters.