Crypto industry titans urge the US to deliver profound regulation to the industry

  • Congress representatives listened to the views of crypto experts during roundtable discussions.
  • Lack of clarity will lead to innovations outflow.

Cryptocurrency industry leaders participated in a roundtable discussions in the US Congress, arranged by Rep. Warren Davidson on Tuesday. Most experts came from the institutional sector, represented by such companies as Fidelity, Nasdaq, State Street, Andreessen Horowitz. They urged the US regulatory authorities to develop a robust regulatory framework for cryptocurrencies and blockchain; otherwise the country will be left behind in this race for technology innovations.

"We all want a fair and orderly markets; we want all the same things regulators do. It doesn't have to be done in the same way it was done in the past, and we need to be open to that," Mike Lempres, chief legal and risk officer at San Francisco-based Coinbase, said.

The industry leaders insisted that current rules and regulations applied by the U.S. Securities and Exchange Commission are outdated and well-suited for new instruments and technologies. The "Howey Test" that is currently used by the SEC to decide whether or not a cryptocurrency is a security was developed in 1946 and needs to be modernized.

The participants of the roundtable also emphasized a "chilling effect" caused by regulatory uncertainty and difficulties with current laws interpretations. 

"If the rules are unclear, unwritten, or unknown it's not appropriate to punish people for making the wrong guess," David Forman, a chief legal officer at Fidelity Investments lamented.

The community leaders believe that the US risks losing its innovative edge if it fails to provide clarity and create strong guidance. Companies will just flee to more crypto-friend,y jurisdictions like Malta. 

"The competition around the world is real. But there is still time and opportunity for the U.S. to be a leader here," according to Joyce Lai, a lawyer at blockchain software technology company Consensys.

Meanwhile, cryptocurrency market reaction has been muted so far. It should be noted, that the panelists were not represented by retail investors and short-term traders. However, their share of the market is estimated at 23% of the total Bitcoin issuance, which roughly equals $4.8B.

BTC/USD climbed above $6,400 handle during early European hours, while XRP has become a growth leader once again, gaining over 16% d/d to $0.5260 by press time. 

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