The U.S financial regulatory authorities are preparing to take steps to regulate the cryptocurrency market due to growing concerns that lack of proper oversight may cause harm to investors.
In an interview with the Financial Times, Michael Hsu, who was installed this month as acting Comptroller of the Currency (OCC), said he wished US officials would work together to set a “regulatory perimeter” for cryptocurrencies.
“It really comes down to coordinating across the agencies,” Hsu said. “Just in talking to some of my peers, there is interest in co-ordinating a lot more of these things,” he added.
The cryptocurrency market has been a rollercoaster ride this year. In February, the price of Bitcoin began a meteoric rise after Elon Musk, the CEO of Tesla said the company had invested $1.5 billion into the cryptocurrency, triggering the flagship currency to an all-time high of $64,863.10.
However, the price of Bitcoin and other altcoins plunged due to FUD (Fear Uncertainty and Doubt) over a series of news events that cast doubt over the future of the cryptocurrency market. First, was the proposed income tax of 40% by the Biden administration, then environmental concerns highlighted by Elon Musk who then moved to stop Bitcoin from being used as a means of payment when purchasing Tesla cars. The icing on the cake came from Chinese regulators’ crackdown on mining and the use of digital coins.
The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have also discussed how to protect investors in the cryptocurrency market. Gary Gensler, the SEC chair, told a House committee last week that there are “gaps in our current system,” pointing to a potential need for legislation to specify which regulator should oversee cryptocurrency exchanges. Gary Gensler said he intends to bring “similar protections to the exchanges where you trade crypto assets as you might expect at the New York Stock Exchange or Nasdaq.”
