Why U.S Restrictions on ICOs and Exchanges Is Likely

[JuniAiko]

https://www.youtube.com/watch?v=6PKyDd1wSIA

The U.S Senate met on February 6th to discuss "virtual currencies" such as Bitcoin. Many interpreted this meeting as bullish for Bitcoin and other cryptocurrencies, primarily off the back of CFTC Chair Giancarlo's testimony and the idea of a "thoughtful regulatory approach."

Steemit Post: https://www.youtube.com/redirect?v=6PKyDd1wSIA&event=video_description&redir_token=aPMEusKZLQmF5G07HdhlZy3vhud8MTUxODUyODI2NEAxNTE4NDQxODY0&q=https%3A%2F%2Fsteemit.com%2Fcryptocurrency%2F%40cryptovestor%2Fwhy-u-s-restrictions-on-icos-and-exchanges-is-likely

While many caught onto the theme that ICOs were not liked by anyone, I think many didn't logically take it to the next step. If all ICOs are securities, aren't many altcoins as well? And if they are, what becomes of exchanges that enable the trading of these altcoins? It was mentioned many times at the hearing that exchanges weren't adequately regulated due to state-specific legislation and the idea that money transmitter licenses weren't designed for such secondary market trading.

There were other red flags as well, such as the idea of escalating Bitcoin to FSOC as a systemic risk or that the principle idea behind Bitcoin is to replace the U.S dollar which is NOT how we want regulators to view Bitcoin as they will see it as a much bigger threat.

Another important detail that many seemed to ignore was that the focus of the meeting seemed to be on how blockchain was valuable, but cryptocurrencies weren't. The only people who seemed to argue against this idea was CFTC Chair Giancarlo and Senator Warren.

Instead, the focus was on how blockchain technology could help regulators do their jobs through increased transparency of data. This usually is a fancy way of saying "more power to government and less privacy." It begins with good intentions, but that's usually what it devolves to.

All in all, there were many details most chose to ignore from the hearing that I wish were discussed more. There were obviously some bullish elements to it as well, but they have been discussed to death in media and hence I've chosen not to cover them. I hope that we do see a "thoughtful regulatory approach," but it appears a bumpy road ahead is likely.

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[Tactical Genius]

Well,i have always maintained that this is a year of regulations and will not be only in the united States,even mt own country Ghana's finance ministry is taking steps in regulating virtual currencies.So we have to be prepared for that but in any case it will a good idea to cut off scams and other unscrupulous activities in the cryptospace.

[zenhu]

They want take tax from it, then they realise they cant. So they just ban it. Thats my opinion though.

[btctube]

They want take tax from it, then they realise they cant. So they just ban it. Thats my opinion though.

I think they can tax it if they just will cooperate with the exchanges in their respective countries so the more exchanges in their countries the more they could money could be acquired by the government. This should be their first aim so if they legalize it and encourage using crypto, who knows their country will dominate the cryptospace.

[JuniAiko]

I do not believe an out-right ban is not likely, as they might lose votes firstly?

However, at the minimum, exchanges will very likely be subjected to stronger regulations + tax compliance (i.e. requiring them to collect and submit identity of participants/members and trade activity), which isn't a bad thing IMO.
And ICOs may perhaps be banned from being listed on exchanges -- hopefully only those considered as securities and not an outright ban on tokens.

[sycaburatan]

I couldnt disagree,you are right these senators doesnt valued the cryptocurrencies and most of them arent scumbags which doesnt have any knowledge with this debate,Cryptocurrencies are just part of the blockchain which is the technology behind bitcoin if they dont want some transparency in data they shouldnt agree to use the blockchain because blockchain technology is givising us to transparency to our transcations,morelikely it will end up the same like before they would still push the regulation of the whole cryptocurrencies in the U.S.

[alyssa85]

What I think will happen is that they will subject ICOs to the same regulations that apply to IPO's. So whitepapers have to be substantial, accounts will have to be made public, the regulator consulted before the ICO and so on.

It should eliminate the scams but still let genuine proposals to go through.

[valnd]

Well it's regulations. Try to protect it's citizen from scam and it's not only us that restrict it's citizen from participating in ICOs. there other few countries that have taken the steps and many more to join. it's all regulations.

[KevenDabid]

This year, not just in the United States, countries are trying to impose further restrictions on the cryptocurrency market, but they are restricting the direction of the ICO, not banning bitcoin.

[kit1971]

Wether we like it or not it's coming sooner or later. Taxation aside...scams and laundering will be the prime objectives for implementing regulations. It may actually create stability and trust to cryptos and weed out the piles of scam ICO's out there.

[sorrysteve1]

They want take tax from it, then they realise they cant. So they just ban it. Thats my opinion though.

I think they can tax it if they just will cooperate with the exchanges in their respective countries so the more exchanges in their countries the more they could money could be acquired by the government. This should be their first aim so if they legalize it and encourage using crypto, who knows their country will dominate the cryptospace.

Taxation really shouldn't be an issue, in fact it shouldn't be an issue right now if people were honest and self-declared. Tax evasion is the issue instead of taxation, that can be countered to large extents by ensuring exchanges have to conduct KYC and provide that information as well as details of withdrawals etc to the government.

Regulation is inevitable and we have to accept it while from our end ensuring it's a fair level of regulation.

[MV7]

I think there's a lot of room of misinterpretation based on the comments.

I basically heard it as the Senate hearing as the government trying to make sure crypto doesn't get harmed by ICO scams and exchanges. Basically good news.

Not all "restrictions" are necessarily bad.

[verasity]

We've already seen ICOs getting their currencies delisted in Hong Kong. If the SEC goes after early ICOs hard (deeming them to be securities) a lot of people could be getting their money sent back to them and projects going under. A new breed of ICO will then emerge, ones that are fully registered as securities and only allow investment from sophisticated investors.