On Tuesday, Feb. 6, 2018, the Senate Committee on Banking, Housing, and Urban Affairs held a hearing fully devoted to cryptocurrencies with Jay Clayton (Chairman SEC) and J. Christopher Giancarlo (Chairman CFTC) as the sole witnesses.
Initial Coin Offerings (ICOs) have become disreputable for being used as a tool for scammers looking to take money from investors.
Clayton said in his testimony: “Some have taken advantage of this lack of understanding and have sought to prey on investors’ excitement about the quick rise in cryptocurrency and ICO prices,” He went on and said: “There should be no misunderstanding about the law. When investors are offered and sold securities—which to date ICOs have largely been—they are entitled to the benefits of state and federal securities laws and sellers and other market participants must follow these laws.”
He also stated: “ICOs that are securities offerings, we should regulate them like we regulate securities offerings, end of story,”
While both Clayton and Giancarlo agreed that more regulations were necessary in order to protect investors from fraud, Giancarlo had kinder words to say about cryptocurrencies and Bitcoin: “We must crack down hard on those who abuse our young enthusiasm for bitcoin and blockchain technology,” he went on and said: “We owe it to this new generation, to respect their interest in this new technology with a thoughtful balanced response, not a dismissive one,”
Even some senators on the committee named some of the benefits behind blockchain technology and expressed interest in achieving a better understanding of cryptocurrencies.