The world of cryptocurrency may become a bit more restrictive in the United States. Congress plans on taking action to address the lack of regulation in the digital currency realm. Members of Congress recently reached out to the Securities Exchange Commission for clarification. Consider this the first step towards a form of an eventual regulatory overhaul.
SEC Chairmen Jay Clayton recently received a letter from members of Congress. The letter requested some insights into how the SEC views cryptocurrency. The request in the letter comes off as rather broad, but this may be unavoidable. The SEC hasn’t presented a clear picture of how it views the cryptocurrency industry. As such, trading of digital assets occurs without any real oversight.
The lack of regulation draws many to cryptocurrency. Numerous problems, however, exist. If someone’s holdings of cryptocurrency are stolen, no federal backing or insurance exists to recover the lost assets. Also, reports continue to emerge about how cryptocurrency moves money for criminal enterprises. The anonymous nature fo cryptocurrency facilitates these actions.
Cryptocurrency exists as a vehicle in which people can move money without much oversight. Many choose to use cryptocurrency for online purchasing, but digital cash gains its best notoriety from trading. Procuring cryptocurrency for investment purposes isn’t a difficult concept. Someone who purchases $1,000 of cryptocurrency makes a considerable profit if the value rises to $2,000. Several pioneers in cryptocurrency investing/trading did see their returns deliver massive profits. Unfortunately, cryptocurrency proved its volatility. Investors lost money after values crashed.
The cryptocurrency trading world exists, for the most part, outside of the established global banking systems. While this appeals to some, limited or non-existent oversight creates dangers. Government regulators see too many problems in the current landscape. For this reason and more, greater regulation may soon emerge. The formal SEC letter reflects a formal first step towards regulation in the United States.