Warren Davidson (R-Ohio), US representative said the initial coin offering (ICO) market needs “light touch” regulation on CNBC’s Squawk Box today, June 21.
When it comes to cryptocurrency regulation, Davidson contended that the “big thing” the market needs is a “light touch regulatory framework” which, according to the congressman, would give more conviction.
Davidson focused on the need of characterizing the status of cryptocurrencies, calling attention to the ongoing declaration of the U.S. Securities and Exchange Commission (SEC) that the best altcoin Ethereum (ETH) will be viewed as a product as opposed to a security. He included that the government still “[has not] put together” a coherent regulatory framework, claiming that there’s still “arbitrage going on.”
“You don’t really know when somebody does an ICO, whether they are really launching this great distributed ledger product that is going to be a security or if it looks a little different, like [Ethereum] and [Bitcoin] determined to be essential commodities.”
Davidson expressed that a lightweight regulatory structure could give greater lucidity to investors without hindering projects with undue regulations. He said that a clear regulatory structure would spare organizations from the bureaucratic challenges of exploring diverse court choices at different levels.
The congressman also clarified that the absence of regulatory clarity influenced the ICO to market dangerous and possibly hazardous, as deceitful ICO projects could exploit investors. He supported the correct use of know your client (KYC) and anti-money laundering to ensure we secure ourselves.
When people try to get inquiries on why crypto is the “currency of choice” for individuals that are into illegal activities, Davidson answered:
“I’m not sure that it would be considered the currency of choice, but it is easy to transmit through time and space, and its distributed, you don’t need a central clearing house… but if you look at how cases like Mt. Gox have been solved, there are ways to trace who is the beneficial owner…”
Davidson said that crypto asset streams are “more trackable than cash,” and “certainly more open than hawala network, and both those things are still legal.”
Recently, Nasdaq CEO Adena Friedman guaranteed that ICOs pose “serious risks” for retail investors and featured that the ICO processes have “almost no oversight.” from the SEC in correlation with initial public offerings (IPOs).
On June 19, CBOE Global Markets President Chris Concannon asserted that the ICO market could soon face a two-fold administrative “reckoning,” should the SEC arrange ICOs as unregistered securities.