Cryptocurrency Now 'On the Federal Legislative Radar' After Hearing
Congress' views on blockchain are still being formed, but many are looking to steer their education in one direction or another.
October 16, 2018 at 02:14 PM
3 minute read
The original version of this story was published on Corporate Counsel
Witnesses with opposing views on cryptocurrency and blockchain brought their opinions to a hearing in front of the U.S. Senate Committee on Banking, Housing, and Urban Affairs last Thursday in a bid to influence Congress' thinking on the nascent technology.
Dr. Nouriel Roubini, a professor of economics and international business at New York University's Stern School of Business, represented the staunchly anti-crypto and blockchain side, calling crypto the “mother and father of all scams and bubbles.” He cited scalability concerns, the centralization of mining power in non-U.S. countries and the environmental toll as problems with the industry's growth.
Snell & Wilmer partner Eric Kintner said Roubini's stance on crypto and blockchain stood out to him during the hearing.
“They generally haven't had somebody as antagonistic toward it. … That's OK, I think it's good that the committee has these varying views,” Kintner said.
He said that most of the concerns Roubini raised are ones that have been raised by others in the crypto space, and that companies and their lawyers should be—and often already are—working on ways to address those issues.
Andrew Ray, a partner at Morgan, Lewis & Bockius, said Congress' views on blockchain are still being formed. Because it is “extremely early,” he said it's possible the two competing narratives presented Thursday have not even worked their way through Congress yet.
“Blockchain and cryptocurrency are now kind of on the federal legislative radar,” Ray said.
And with that increased attention comes increased education for regulators. The hearing allowed senators on the committee to show how much they've learned about the emerging field. Ray said that the questions on Thursday about consumer protections in the industry seemed to be a soft entrance for Congress.
“Having … Congress start to look at this, they're, I think, starting to educate themselves in the way that regulators have been educating themselves and the more established financial institutions and technology providers have been educating themselves,” Ray said. “But I think we're in the extreme early innings when it comes to some sort of federal legislative action.”
Clyde Tinnen, a partner at Withers Bergman, said that if Congress does decide to regulate, laws would likely focus on protecting the public. He said that if crypto and blockchain companies are working to protect consumers already via cybersecurity and illicit activity, the shift to a federal regulated industry could be an easier one.
It also helps if companies have input into what those regulations will look like. That's why, Kintner said, crypto and blockchain companies should start lobbying and educating now.
“It is time for companies in the space and individuals that believe in the technology to get off the sidelines and engage with their elected representatives,” he said.
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