Chiefs of SEC and CFTC get set for Senate cryptocurrency hearing (The role of SEC and US Commodity Futures Trading Commission in virtual currencies)

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The U.S. Senate hearing which is to be held next week would see the heads of US SEC and CFTC testify on cryptocurrencies. The hearing would try to determine the role of SEC as well as US Commodity Futures Trading Commission in virtual currencies. The activity in the virtual currency space is increasing day by day.

Lawsuits by SEC:

This hearing comes in the wake of recent lawsuits which have been filed by SEC against many of the fraudulent ICOs. CFTC has also taken the steps in order to scrutinize the cryptocurrency exchanges as well as cryptocurrencies and ICOs.

According to the organizations, investors need to be protected against fraudulent ICOs as well as other such offerings.

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Also, there needs to exist a proper regulatory framework which would be connecting the various stakeholders like lawyers, exchanges, financial services companies in order to provide a clean platform for trading in cryptocurrencies.

Increased regulations:

All over the world, countries are trying to create a proper regulatory framework to allow the investors to trade in cryptocurrencies in complete peace. This is one of the main reasons why the US, as well as other cryptocurrencies, has started regulating as well.

This hearing is a step in the right direction as more and more organizations would monitor the activity in the cryptocurrencies space which would help the investors against fraudulent ICOs. It remains to be seen the jurisdiction which is established by these organizations as most of the ICOs, as well as cryptocurrencies, are global in nature.

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With the increased scrutiny on ICO’s as well as cryptocurrency exchanges, it remains to be seen whether the activity sustains in this market or whether it dies down.

Moreover, it is the company’s decision to allow or disallow the US investors as well. If the US investors are not allowed, automatically the jurisdiction of the commission would be eliminated as long as the company is not based out of US. This is one of the main reasons why many of the ICOs are actually excluding the investors from the United States to eliminate increased scrutiny.

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With the increase in the regulatory framework, it is becoming more and more difficult for the companies to launch their ICO’s. If indeed, the process is made more complicated like IPOs, the number of companies which are launching ICOs would drastically move down as well. This would reduce the interest in ICOs and the gains which investors can reap from them.

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