Industry

US Congress Holding Roundtable With Industry Insiders to Draft Growth Promoting Regulations

Thomas Delahunty | September 25, 2018 | 6:00 am
round table
Industry

US Congress Holding Roundtable With Industry Insiders to Draft Growth Promoting Regulations

Thomas Delahunty | September 25, 2018 | 6:00 am

Facing a murky regulatory landscape in the U.S., representative Warren Davidson, R-Ohio, is hosting a roundtable Tuesday that includes representatives from Wall Street, venture capital firms, government regulators, and cryptocurrency industry insiders in attempts to draft policy that doesn’t stifle growth.

Crypto Regulation to Be Discussed by Insiders as Well as Government Regulators

The discussions, “Legislating Certainty for Cryptocurrencies,” will see experts weighing-in on how to police the new asset class ahead of a House bill Davidson is drafting this fall regarding regulation of the coins and associated initial coin offerings (ICOs).

“Your input is critical to helping us preempt a heavy-handed regulatory approach that could stall innovation and kill the U.S. ICO market,” Davidson said in a letter to invitees.

The congressman outlined a list of eight questions for the meeting, including “What is the best way to protect consumers from fraud?” The discussion will also cover private funding disclosures and token issuance laws, according to a spokesperson for Davidson.

The representatives at the round table will include Fidelity, State Street, venture capital firms Union Square Ventures and Andreessen Horowitz, and the Nasdaq, according to an attendee list seen by CNBC. Cryptocurrency startups Ripple, Coinbase, and Circle will also take part. As for the government, the U.S. Chamber of Commerce will be present, and Representatives Ted Budd, R-N.C., Tom Emmer, R-Minn., French Hill, R-Ark., and Darren Soto, D-Fla., are set to give opening remarks.

Balancing Consumer Protection and Industry Innovation

ICOs in particular caught the attention of regulators after Bitcoin surged to almost $20,000 towards the end of last year. Other, smaller cryptocurrencies have also attracted a large numbers of investors, which bring the total fundraising amount so far this year to around $12 billion, according to estimates from data analysis firm Autonomous Next.

Davidson’s bill will be the first of its kind in Congress, and it seems as though he understands that the wrong kind of regulation will likely stifle industry growth and development.

As noted, following last year’s cryptocurrency boom U.S. financial watchdogs have been attempting to balance consumer protection and innovation in the multi-billion dollar market. At the same time, many crypto industry leaders have complained that finance laws need to be updated to accommodate the complex new digital asset class.

Some legislators, like Brad Sherman, D-Calif., have been especially vocal about criminals abusing the anonymity permitted by some cryptocurrencies. He and others have also brought up the potential for terrorist financing and for skirting know your customer (KYC) laws, as well as money transmission standards that exist for fiat currencies.

That said, Pat Berarducci, a lawyer for blockchain software technology company ConsenSys who is attending Tuesday’s roundtable, claims that most industry participants want to achieve the same goals as regulators. He compared the fast-paced innovation and the legal uncertainty of today to the early dot-com years.

“There are a lot of regulators wanting the U.S. to develop ‘do no harm’ policies to allow innovation to grow, just like they did in the internet era,” Berarducci said.

A major fear within the industry is that if the U.S. cracks down too hard, startups will move to less restrictive jurisdictions like Switzerland and Malta.

“Businesses and entrepreneurs are making decisions about where to locate and grow based on regulatory considerations,” Berarducci said. “Policymakers are trying to foster innovation [and] at the same time protect consumers.”

 

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