US regulations on virtual currency: Court to decide whether government as the authority to regulate Bitcoin

Court to decide whether government as the authority to regulate Bitcoin. It is common knowledge that governments all over the world are trying to regulate cryptocurrencies. Currently, federal judges in Brooklyn, New York are trying to answer this question. They are trying to figure out whether the government should be able to regulate cryptocurrencies like they normally regulate stocks.

The problem here is not just of regulation but it is of jurisdiction as well. Cryptocurrencies are global. Owing to this very reason, any ruling from a single country would not be good enough.

Cryptocurrencies should just be considered as a security

According to a former SEC and Justice Department lawyer, Peter Henning, cryptocurrencies should just be considered as a security.

The law is getting stricter on digital as well as crypto currency-based assets. Businessmen in Brooklyn Maksim Zaslavkiy was actually charged in a case last November where he sold cryptocurrency tokens to investors claiming that they had the backing of real estate as well as diamonds when in truth, they did not. The SEC was also party to the case.

According to the judge, the lawyers of the businessmen would be allowed to argue whether IOC’s can be considered as a security under the US law or not. In case, IOC’s cannot be considered as a security, the protection which the normal investors can get from SEC would be eliminated as well and such lawsuits would be eliminated as well.

The legal status of ICO’s: nothing is clear

Currently, when it comes to the legal status of ICO’s, nothing is clear. Moreover, different countries follow different rules and regulations. Therefore, just because it is considered as a normal security in the United States, does not mean that other countries would also follow suit as well. However, it would set a strong precedent all over the world that ICO’s, as well as cryptocurrencies, cannot be used to defraud investors and they need to provide some investor protection as well so that money is not lost.

Many countries are trying to regulate cryptocurrencies

The judgment of this particular case would be widely looked into as a precedent. Many countries are trying to regulate cryptocurrencies and that is why it is important to have at least some kind of legal precedent regarding these cryptocurrencies. Only after this case or this judgment comes out, most of the governments would be able to take a proper step in order to protect the investors and in order to better regulate cryptocurrencies. The next hearing of the case is in March 2018 and it would be closely followed to find out what the judges think about cryptocurrencies. / Source: Fortune
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Adam Webb is editor in Smartereum, blockchain and currency news, where he produces updates on Blockchain, Ethereum and other alternative cryptocurrencies.

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