US House Hearing on ICOs Draws Mixed Reactions
The US House Capital Markets, Securities and Investment Subcommittee convened on Wednesday, March 14 in Washington D.C. to discuss cryptocurrencies and initial coin offerings (ICOs), drawing both positive and negative reactions.
Many of the congressional speakers focused on issues related to the US legislative approach to cryptocurrencies and ICOs, noting a need to strike a balance between protecting investors and fostering an innovative environment for growth and blockchain technology development.
Rep. Carolyn Maloney (D-NY), the ranking Democrat on the subcommittee, announced that she is working on a cryptocurrency oversight bill aimed at exchanges that offer trading services for digital currencies.
US lawmakers asked questions to a host of cryptocurrency industry experts and representatives of academia. Chris Lempres, chief legal and risk officer from Coinbase, fielded a range of questions from legislators about Coinbase’s KYC (know your customer) policies and what steps the exchange was taking to prevent extremists from funding their activities through the platform.
Congressman Brad Sherman (D-CA) had some of the most negative comments on ICOs, saying that ICOs are a “fixed, fraudulent gambling scheme with no social benefit” popular with guys “who want to sit in their pajamas and tell their wives they’re going to be millionaires.”
Much of the conversation on regulating ICOs focused on which agency would do the regulating, the US Securities and Exchange Commission (SEC) or the Commodities Future Trading Commission (CFTC). Regulators agreed on the need for the SEC to more clearly define when ICOs should be considered securities offerings versus commodities offerings.