This week's Senate committee hearing on virtual currency has left open questions about how regulatory oversight will be conducted in the burgeoning cryptocurrency field.

So far, the U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission have taken a lead in warning investors of virtual currency risks and taking enforcement actions against alleged bad actors.

Lawmakers in the U.S. Senate Committee on Banking, Housing and Urban Affairs called upon SEC chairman Jay Clayton and CFTC chairman Christopher Giancarlo during Tuesday's hearing to consider the path forward for cryptocurrency oversight and whether new legislation will be necessary.

Attorneys who work on virtual currency spoke to The National Law Journal this week about what they saw at the hearing and what it might all mean for regulation in this space.

Nicolas Morgan, partner at Paul Hastings, said it is remarkable that both Clayton and Giancarlo sat before Congress and had no specific legislative requests to mention.

When the two were “essentially being asked if they needed new legislation, their answer was basically, 'No. I don't think so,'” Morgan said.

But he pointed out there are steps the SEC can take even without new laws on the books.

The SEC has the power to issue no-action letters for companies it feels are in violation of securities laws, Morgan explained. He thinks these letters are an easy step and would provide more insight as to what the SEC's expectations are around virtual currency.

Morgan also said that with any company offering securities, those issuing these currencies have two options: register with the SEC or request an exemption. The exemptions are likely to fall under Regulation D or Regulation S, and Morgan said it would be helpful if the SEC would provide further guidance on how those regulations relate to cryptocurrency. He noted the pair of regulations have not been updated in years, certainly not since blockchain and virtual currencies have become front of mind. 

As for the CFTC, there are logical next steps for that agency as well. Stephen Humenik, of counsel at Covington & Burling, said that the commission itself will have hearings, including its upcoming meeting for the CFTC's technology advisory committee, which is scheduled for Feb. 14. Additionally, he said, “the CFTC traditionally has also held roundtables trying to determine what sort of regulations to issue, and you'll definitely continue to hear chairman Giancarlo speak about these issues.”

Humenik said that the CFTC chair has done a good job at laying out what the agency's jurisdiction is. He said that while the commission does have enforcement authority it does not have regulatory authority over spot markets, or markets where a commodity is expected to be delivered immediately.

According to Humenik, the question from here will be: “Will Congress give that authority to them?”

Blake Estes, counsel at Alston & Bird, doesn't see legislation as necessary for cryptocurrency. In fact, he was concerned by Clayton's comments that seemed to indicate that all initial coin offerings should be subject to SEC oversight. Estes doesn't believe this to be appropriate for all ICOs, as not all tokens should be classified as securities.

He gave the example of a theme park or a movie theater wanting to issue admission tickets as tokens, which he feels would not fall under the category of a security and therefore should not be regulated as such.

At the end of the day, Estes said, the cryptocurrency market is currently getting a lot of hype but, he emphasized, it's still a young market. 

“People want to compare it to the evolution of the internet, and if that's a good analogy, we're still in the mid- to late-90s in the development of this,” Estes said. “It takes time to evolve, and the regulation will evolve with [it].”