Americans Facing FRAUD Risks – Could This Senate Bill Change That?
(RepublicanReport.org) – Over the last several years, the investment world has been swept up in a new craze — cryptocurrencies. Many of the lightly regulated online coins have increased exponentially in value, making millionaires (and even billionaires) out of the buyers that had the foresight to get in on the ground floor.
However, huge controversies surround cryptos. Many investors have lost their life savings in shady deals, and policymakers worry about the currencies’ potential to facilitate black-market trade. Newly proposed legislation in Congress would bring about drastic changes in terms of the rules around digital asset trading.
Will Cryptos Soon Fall Under Federal Government Rule?
On Wednesday, August 3, a bipartisan group from the Senate Agriculture Committee introduced the Digital Commodities Consumer Protection Act of 2022. The bill would put Bitcoin and Ether, the two most popular cryptocurrencies, under the regulatory jurisdiction of the Commodity Futures Trading Commission (CFTC). This agency has authority over certain capital market instruments.
The bill would force any online platform providing crypto trading services to register with the federal government. The measure would also expand the CFTC’s ability to define what a digital commodity is, though the Securities and Exchange Commission (SEC) would still have the power to define a security. Additionally, the proposed law would federalize the rules in certain areas that are currently subject to various stipulations at the state level. According to a statement from Boozman, cryptocurrency is currently only ruled by a state-level “patchwork of regulations,” which isn’t enough to protect people from scams.
This development comes following a major drop in the prices of the biggest online coins over the last few months.
Why Has There Been a Push to Regulate Cryptocurrencies?
There are many reasons lawmakers are pushing for the regulation of cryptocurrencies in general. One is the protection of consumers and investors from scams.
When you purchase a share of a publicly listed company on a typical exchange, you can be reasonably confident you’re safe from various exploitations. Because of the watchful eye of the SEC and other governing bodies, company owners would have a hard time defrauding ordinary shareholders through insider trading or illegal price manipulating techniques.
This is not the case when it comes to digital currencies, and the exchanges used to buy and sell them. Developers of smaller, lesser-known coins have executed “rug pulls” on investors, which is where they artificially inflate the price of the asset before selling their holdings. This technique allows them to run away with massive profits that are essentially stolen from smaller investors.
Other reasons policymakers want regulations on virtual coins include:
- Greater transaction transparency to make criminal enterprises more difficult
- Security for investors holding money in currently unregulated exchanges
- More struggles for individuals using cryptocurrencies for tax evasion
Do you think enacting rules regarding digital assets is a good idea? Or do you think it falls into the realm of regulatory overreach?
Copyright 2022, RepublicanReport.org