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As the spotlight continues to shine on cryptocurrencies, more US lawmakers are calling for regulation. This week, Senator Elizabeth Warren (Democrat from Massachusetts) is demanding answers from SEC Chairman Gary Gensler. She has given him a deadline of July 28, or the end of the month, to answer hard questions on how cryptocurrencies should be regulated.
The problem here is that any carefully orchestrated regulation on cryptocurrencies is going to take much longer than three weeks. First of all, the SEC currently has no authority to regulate any cryptocurrencies, as none have been technically defined as a "security" -- in the letter of the law at least. Secondly, there are over 10,000 different coins (and more are being created every day). It's an extremely complicated issue that would take much longer than three weeks to tackle, as Ms. Warren is suggesting.
Essentially, the first issue that needs to be resolved is defining cryptocurrencies as a security. Only then can any further regulation be put into place. Perhaps the SEC is considering this factor in whether or not the approve the first US Bitcoin ETF, which Cathie Wood's ARK Invest filed for last week. What's clear is that more understanding is needed, especially by lawmakers, in making such decisions.
While Warren calls for regulation, Alabama Congressman Barry Moore has been purchasing cryptocurrencies since May. He disclosed purchases of Cardano, Dogecoin, and Ethereum. As I stated above, more understanding is needed by US lawmakers. Especially how to properly spell "Ethereum" in your disclosures:
Click here to view Mr. Moore's full disclosure filing for yourself.
Senator Pat Toomey (Republican from Pennsylvania) has also been getting some exposure to cryptocurrencies. He has purchased stakes in Grayscale's Bitcoin and Ethereum trust, per periodic disclosures revealed yesterday. What's funny is that Mr. Toomey has taken a completely opposite stance to Ms. Warren in criticizing recent proposal for cryptocurrency regulation.
So clearly, it's a complicated issue. And, like most things political, likely won't reach a consensus any time soon. In short, I think all of these calls for the United States to somehow regulate cryptocurrencies will ultimately be without fruition. The regulation may be coming, but not any time soon. And definitely not before July 28.
