!time:30:52 Congressman Brad Sherman: "Cryptocurrencies are a crock. What social benefit do provide? They allow a few dozen men in my district to sit in their pajamas and all day and tell their wives they're gonna be millionaires. They help terrorists and criminals move money around the world. They help tax evaders. They help startup companies commit fraud..."
!time:36:25 there are over 1400 currencies available but coinbase only allows spot trading in 4 (bitcoin, ethereum, litecoin, bitcoin cash) because they are deemed virtual currencies by regulators and not securities.
!time:41:48 Brummer: one study has noted that "in 32% of ICOs it is not possible to identify the issuer's identity or promoter's origin." No way to know investor protections afforded, or to know the public authority to contact in the case of fraud.
!time:41:48 Brummer: ICOs need to provide plain english and technical language describing proposed technology. Code needs to be publicly available and vetted by third party. Forward looking statement need to be based in fact.
!time:48:55 Rosenblum: "Cryptocurrency is a bit of a misnomer." Some are currencies, but a number of tokens have a very specific purpose on very specific platforms "designed to do very special things".
!time:1:01:02 Lempres (Coinbase): "we are waiting for the dust to settle between the sec and cftc before supporting ICOs. There's tremendous potential, we want to be able to support it. There is an important distinction between what is a security and what is a commodity. They deserve to be treated differently."
Congressman Scott: both SEC chairman clayton and CFTC chairman !time:1:02:20 Giancarlo "have told me that neither one of them has regulatory authority"; they have to rely on states using money transmitter designation. "There's a regulatory shortfall. See my point?"
!time:1:17:05 Valkenbugh: Crypto looks like the dotcom bubble in the 90's. Mainstream investors need to understand that everyone is speculating whether their crypto investment will be the pets.com or the amazon.com of the crypto space.
!time:1:21:52 Valkenburgh: applying the Howie test to crypto, a token is a security when there is the expectation of profits from the efforts of an issuer who we rely on to deliver something of economic value.
!time:1:26:20 Lempres (Coinbase): blockchain tech gives you more insight into bad actors than any other financial instrument. Coinbase uses both internal developed and commercially available blockchain analytics tools to link "bad nodes" to others with whom they've interacted. "Nearly 20% of our employees dedicated to compliance."
!time:1:27:20 Congresswoman Maloney: concerned that "average people" are using cryptocurrencies as investment tool rather than currency and will lose money when "bubble eventually bursts". Working on a bill to provide investor protections for cryptocurrencies"that have the characteristics of an investment... like we have for stocks and bonds... including disclosures, that will be regulated by the SEC."
!time:1:31:10 Congressman Emmer: "I have a problem with 'government is here to help us' and we need more government... I tend to believe people are in these things for good. That they're trying to improve their own lives and hopefully the lives of people around them... A rising tide lifts all boats."
!time:1:31:38 Congressman Emmer: "I hear elected officials who don't have any concept of what we're dealing with and how exciting it is talking about we gotta run in, we gotta regulate, we gotta create more government infrastructure. I respectfully disagree that that won't act as a wet blanket on this amazing new technology... Milton Friedman predicted this back in 1999..."
!time:1:35:35 Congressman Emmer: "Right now this system gives advantage to the individual, and not to the government, and I'm worried about giving advantage to the government and taking away liberty from the individual. Hopefully we'll be able to meet that balance as we go forward."
!time:1:36:50 Congressman Foster: "Much of our daily lives will involve something like blockchain, so I think it's past time for governments have a look at these digital tokens and figure out how they should be used."
!time:1:47:35 Rosenblum: making a distinction between what is and isn't a security in the cryptocurrency space would "lead the market to distraction." It's difficult to draw a line for when you are no longer relying on the efforts of promoters (using the Howie test), even when a promise for tokens converts to actual tokens operating on a working blockchain. "Don't even bother. Come up with a simple, easy system to use that's gonna apply to all of these things regardless of whether they're a security."
!time:1:52:22 Lempres (Coinbase): Global Intelligence Unit trains "more law enforcement agencies globally than anyone... hundreds of state and local agencies... how the blockchain works, how cryptocurrencies work, what information is there and how to put a case together if they need to put a case together."
!time:2:10:52 Valkenburgh: Chairman Clayton of SEC recognizes distinction between tokens as securities and "pure cryptocurrencies" which should be regulated by Chairman Giancarlo of the CFTC which has the power to police commodity spot markets "ex-post". If a gap exists in federal regulatory authority it may be in the supervision of markets "ex-ante" to set security and transparency standards, now enforced by a patchwork of state money transmission regulations. It may be useful to federalize these.
!time:2:20:40 Valkenburgh: current regulation is "anarchic" both in terms of inconsistency between SEC and CFTC and federal vs state licensing. State by state money transmission licensing is the biggest impediment to the cryptocurrency space because of "redundant and non-productive costs that it imposes on the industry" and ineffective investor protections. Needs to be pre-empted by a federal regime.
!time:2:21:45 Valkenburgh: Chairman Giancarlo of CFTC argued for data reporting, capital requirements, cyber security standards, measure to prevent fraud and price manipulation, anti-money laundering and know your customer protections as requirements for intermediaries in the cryptocurrency space.
!time:1:44:05 Valkenburgh: from a regulatory standpoint a distinction must be made between, on one hand, scarce tokens existing on a blockchain used for payment or computing services, and on the other hand, promises for future tokens once some future tech is built.
!time:1:22:59 Valkenburgh: Bitcoin is a commodity bc it is a scarce digital asset analogous to gold. Ethereum is a commodity because it powers a computing platform analogous to oil powering industry. Filecoin is a commodity like real estate "measured in gigabytes instead of square feet".