The chairman of the United States Commodity Futures Trading Commission (CFTC), Christopher Giancarlo, recently discussed the challenges associated with assessing the regulatory implications of bitcoin and cryptocurrency according to the CFTC’s “decades[-]old” legislative mandate.
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CFTC Chairman Criticizes 1930’s Legislative Apparatus
In a recent interview with , Mr. Giancarlo acknowledges the inappropriateness of the CFTC’s antiquated regulatory apparatus when assessing the innovative phenomena of bitcoin and cryptocurrencies.
When asked of the legal classification of bitcoin, Mr. Giancarlo stated: “It’s a great debate […] a lot of people are looking at it from so many different angles, and we at the CFTC have been looking at it for a number of years now.”
Mr. Giancarlo emphasized the challenge of applying the CFTC’s outdated regulatory apparatus to bitcoin, stating that “the statutes under which [the CFTC] operate[s] w[as] written, in our case, in 1935, and the SEC in 1933-34, and it’s often hard to look at those statutes, and find out where something as new and as innovative as bitcoin, and many of the other cryptocurrencies […] fall[s] into a regulatory regime that was written decades ago.”
CFTC Chairman Predicts bitcoin’s Regulatory Challenges Won’t Be “Resolved Any Time Soon”
When queried regarding previous statements arguing that bitcoin exhibits similarities to commodities, Mr. Giancarlo stated, “I think there are certainly aspects of this that you might call a virtual asset, like gold – only its virtual […] It is an asset that many find worthy of holding for a long period of time,” adding that cryptocurrencies “have aspects […] that might not be ideal as a means of exchange, but might be suitable as a buy and hold strategy.”
The CFTC chairman added “But the truth of the matter of it is, is that bitcoin and a lot of its other virtual currency counterparts, really have elements of all of the different asset classes […] and so, as a world, and as regulators, we are coming to grips with this just now, in real-time,” concluding that “It’s complicated, and I don’t see it being resolved any time soon.”
bitcoin Futures Regulations “Working Quite Well”
Mr. Giancarlo pointed to the bitcoin futures market as a successful example of cryptocurrency regulation, stating “In our case though, we have seen the licensing and the operation of bitcoin futures contracts, which are cash-settled contracts on bitcoin – operated by [The Chicago Mercantile Exchange (CME)] and [The Chicago Board Options Exchange (CBOE)] – and those contracts are working quite well.”
When asked of the potential risk of “over-zealous” regulation […] stifl[ing] innovation” in the cryptocurrency sector, Mr. Giancarlo stated that “As a regulatory agency, […] the [CFTC] has often been in the forefront of technological innovation, it’s in our DNA as an agency. We try to apply our statute on a principles-based approach – we look at the core principles and apply it to new innovations like this – and that’s the approach that we have taken in the case of bitcoin futures.”
Responsibility for Development of Legislation Lies With Congress
The CFTC chairman emphasized that the development of an effective regulatory apparatus for cryptocurrencies lies with the United States Congress, stating “At the end of the day, it’s for Congress, and not regulators, to decide whether new policies should be evolved for these new asset classes.”
“All […] regulators have to apply [their] statute in the spirit in which it was written […] by Congress,” added Mr. Giancarlo.
Mr. Giancarlo revealed that many politicians are coming to recognize the need for legislative reform regarding the development of cryptocurrency regulations, stating “I think there’s certainly an appetite, amongst a number of congressmen and women, and senators that I have spoken to, to approach this with some new eyes, some new thinking, and so I think there is a growing on Capitol Hill for some rethinking here.”
Growing Recognition of Need for Regulatory Reform
The CFTC chairman stated that “Jay Clayton from the SEC and I recently testified in front of the Senate banking committee, and we talked to Congress about whether maybe some new legislation might be appropriate in this area, and I think you will see, going forward, perhaps in this Congress or a future Congress, some attempt to deal with this new innovation.”
Despite the increasing recognition of the need for legislative reform, Mr. Giancarlo stressed that it will take time for a robust regulatory regime to be developed for bitcoin and other cryptocurrencies.
“I know bitcoin has been in place […] since eight or nine years or so, but the fact of the matter is [it] still is relatively new for us at the regulatory agency,” said Mr. Giancarlo, adding that it will “take some new open-mindedness, some new way of thinking about it, for us to get our heads around it entirely.”
What is your response to the CFTC chairman’s comments? Share your thoughts in the comments section below!
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-DASHUB Inc., signs commercial agreement with Clears as its exclusive KYC/AML user
verification solution.-
-Clears provides DASHUB’s users with international compliance, data privacy, security, and frictionless interaction using the blockchain-
NYC-New York- May 03rd 2018 – Clears, a revolutionary data-less Know Your
Customer [KYC] service, powered by the Ethereum blockchain, and DASHUB, an online automotive marketplace , inked a commercial agreement for the implementation of Clears solution to verify compliance regulation of DASHUB users. Clears will be the exclusive provider of KYC and AML verification for investors and users on DASHUB’s token sale for AXT and their planned future platform called the Automotive eXchange Platform (AXP).. Clears system assures compliance while protecting users personal data. Data given to Clears is encrypted, hashed and cold stored. Clears maintains an unparalleled integrity and security for its users and mitigates its partners liability in the case of audits.
“Compliance is a top priority at DASHUB. The automotive sales industry is a constant
victim of fraud, and requires unique conditions to secure its marketing funnel.
Partnering with Clears was an obvious choice for both user protection and their unique blockchain approach.” said Max Kane President and CEO of DASHUB.
KYC—or Know Your Customer—is a critical process for all financial companies dealing
with international investors, shareholders and customers. Clears is a technology based on the Ethereum blockchain offering a scalable and personalized KYC process. It aims to expedite the acquisition and delivery of required information to companies and regulators around the world. This, while simultaneously improving the users experience by increasing security of sensitive personal data and lowering the cost for the service provider.
“Clears has invested extensive resources, infrastructure, time and training to build out in-depth blockchain solutions for businesses looking to speed their onboarding without compromising on compliance. This partnership is the quintessence of our mission” said Clears CEO Florian Seroussi.
This unique collaboration demonstrates perfectly the integration of blockchain technology in the mainstream market space, as a solution to cumbersome, costly and outdated models of operational or regulatory barriers.
About Clears:
Clears is a fully customizable, data-less KYC solution, that guarantees a business’s compliance with local and international regulations. Clears eliminates the most prominent points of user anxiety; hacks, identity theft, fraud. In the case of audit by regulators, Clears can provide the original documentation by extracting the documents from the cold storage server. Users can use their Clears credentials on all KYC’s using Clears, giving them a private, secure and convenient experience online.
Join us at :
About DASHUB:
DASHUB Inc. is an online automotive marketplace offering services such as online vehicle sales, on-site inspection services, logistics, financing, and vehicle service contracts (i.e., warranties). Consumers who wish to browse their inventory of over 150,000 vehicles (both salvage and clean title, up to 80% off retail in some cases) can register on www.dashub.com. DASHUB’s current blockchain-based project, the Automotive eXchange Platform, and its supporting token sale (i.e., the AXT token), aims to innovate and disrupt the online car- buying process on a global scale.
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Contact Email Address
mg@clea.rs
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Hearing about the whopping figures that bitcoin exchanges are bringing in, one might be led to believe that all businesses in the field are making money hand over fist. Latest figures from Square, however, show that is not necessarily the case. At least not in the short term.
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SQ Reports Strong Q1
Square Inc (NYSE:SQ), the developer of the mobile payment app Square Cash, has posted its financial results for the first quarter of 2018 on Wednesday, showing overall strong performance. Total net revenue was $669 million, up 45% year over year, and Adjusted Revenue was $307 million, up 51% year over year.
Despite its impressive yearly growth, the company’s stock price fell by about 6% in after-hours trading on Wednesday. Many analysts attribute this drop in SQ shares to the disappointing figures the company presented via its bitcoin-related business. bitcoin revenue contributed $34.1 million to total net revenue in the first quarter, but cost was $33.9 million resulting in a minor add to adjusted revenue of just $200,000.
Taking the Long View
Square CEO, Jack Dorsey, addressed questions about his take on the bitcoin business in the conference call with analysts following the release of the quarterly report. He thinks that the company has a very different customer base than the majority of bitcoin exchanges so they wanted to initially provide just a safe way to participate in the market. “It’s a demographic that typically would not be able to use other exchanges or would find those complicated and something that we wanted to make super easy, but at the same time, continue to protect and make it safe.”
“In terms of the strategy long-term, the first step we wanted to take is to learn as quickly as possible, to offer something that people would find valuable. And the reason we started this initially is because we did see cash customers wanting to buy crypto, utilizing their cash accounts. So, we made that a little bit easier. But we want to learn what this meant for us as a company and also for our industry and really pushed ourselves a lot to make sure that we were best in class in terms of providing a simple easy of exchange and then we can build off of that.”
Square CEO Jack Dorsey in happier times.
Answering a question about other potential uses for blockchain technology, the CEO said “there is no other technology apart from artificial intelligence and machine learning and deep learning that affects the way we can operate our service and the way we can build our business. We’ve built a service that individuals can use, providing more access to more people around this technology and this implementation. And because we are connected directly to the blockchain and using it every single minute of every single day, we have been able to learn quite quickly and how it could impact the rest of our business as well.”
“There is certainly a ton of applications around creating more efficiencies within our business, but also creating new opportunities as well. So, we are still in a learning phase of where we can apply it in the right way because we don’t just want to purely apply the technology where it doesn’t fit but making sure we are actually solving a real need and a real problem whether that be internal or external. But, we do have a lot of excitement for what it can do. And we are building a significant expertise within the company to do that.”
Is this a good opportunity for longer term stock investors add SQ to their portfolios? Share your thoughts in the comments section below.
Images courtesy of Shutterstock, Square.
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