The heads of the Commodity Futures Trading Commission (CFTC) and the Securities Exchange Commission (SEC) are slated to testify in front of Congress on Tuesday (Feb. 6), and are expected to call for more oversight of cryptocurrencies, including bitcoin.
According to a report in Reuters, Christopher Giancarlo, chairman of the CTFC, and Jay Clayton, chairman of the SEC, are expected to testify that the current rules, which have been cobbled together for cryptocurrency exchanges, may need to be replaced by a more federal regulatory framework. This comes as bitcoin declined more than 50 percent in December alone after surpassing $19,000 at one point last year.
The hearing in which Giancarlo and Clayton will testify is more of a fact-finding meeting, focused on what powers the SEC and CFTC have when it comes to overseeing cryptocurrency exchanges. It will also explore how the Commissions can protect investors from the volatility associated with cryptocurrency and from fraud in the largely unregulated market.
Recently, both regulators have been going after digital currency fraudsters, including ones that try to scam investors with initial coin offerings (ICOs). It’s still up for debate as to which regulator is best to oversee cryptocurrency, per the report.
“We are open to exploring with Congress, as well as with our federal and state colleagues, whether increased federal regulation of cryptocurrency trading platforms is necessary or appropriate,” Clayton wrote in his prepared testimony. Meanwhile, Giancarlo said in his testimony that a federal licensing for the cash market would help address any holes in the current oversight system, and could also include capital requirements and other measures to prevent fraud, money laundering and market manipulation.