Beyond Bitcoin, Token Regulation Looms, While Dodd-Frank Still in Bloom?

Bitcoin may be the marquee name in cryptocurrencies, but regulation may loom for its digital dollar brethren.

Recent inquiries from regulators in the federal securities and commodities realms have centered on Ethereum. In this case, The Wall Street Journal reported, the interest is tied to whether the creators of cryptocurrencies beyond bitcoin can have an impact on the value of those very offerings. For Ethereum, the topics under scrutiny include a familiar debate: whether it is in fact a security and thus subject to oversight by the Securities and Exchange Commission (SEC).

Turning to regulatory action within the online lending space, Virginia (the state) has filed a suit against NetCredit, with the allegation that the large lender had charged state lenders more than $47 million in high-interest loans that were in fact illegal. Those loans were doled out to more than 47,000 Virginians across a six-year time period. The suit by the state attorney general alleges that the company exceeded the 12 percent usury cap.

Outside the U.S. and still within the crypto sphere, the Financial Services Agency (FSA) will look to put strict standards in place for exchange operators in Japan. The goal is to reduce the risk of digital currency theft. The Nikkei Asian Review reported that new standards would include in-person visits to exchanges to examine operations as they are conducted.

PHH and the Supremes

Amid the headlines swirling around the Consumer Finance Protection Bureau (CFPB), PHH Corp. decided to step away from appealing a case that continued to question the very constitutionality of the CFPB – a decision that marks the denouement of a case stretching back four years. Under the case, fines had been levied by the CFPB against the reinsurance firm to the tune of $109 million. PHH filed a suit in 2015 alleging the CFPB was unconstitutional. The fine was later dismissed by an appeals court in January of this year. The same ruling rejected the PHH claim of the CFPB’s unconstitutionality.

Dodd-Frank

Dodd-Frank lives. At least that’s the sentiment of one of its creators – in particular, its namesake Barney Frank, former Rep. of Massachusetts. Frank noted that the Senate rollback of at least several of the regulations that had been in place in the wake of the financial crisis of a decade ago still leaves much in place. The revamped bill offers up some changes, including raising the bar for what size bank is “too big to fail” to $250 billion from $50 billion. As Frank said, some key elements are left intact, such as those rules governing the structure of the CFPB.