BITCOIN’S global clampdown could continue as US authorities “are open” to discussing “increased federal regulation” for cryptocurrency trading platforms as market prices tumble, it has emerged.
Christopher Giancarlo, the chairman of the Commodity Futures Trading Commission (CFTC) and Jay Clayton, chairman of the Securities and Exchange Commission (SEC) will appear in front of the Senate Banking Committee today where they will discuss the potential future of virtual currencies.
Prepared testimony’s for the pair were released yesterday and suggest that the US government could slap further regulations on plummeting cryptocurrencies in the near future.
Mr Clayton wrote: “We are open to exploring with Congress, as well as without federal and state colleagues, whether increased federal regulation of cryptocurrency trading platforms is necessary or appropriate.”
The CFTC chairman added: “Virtual currencies…likely require more attentive regulatory oversight in key areas, especially to the extent that retail investors are attracted to this space.”
Bitcoin’s value has dropped by more than 60 per cent in the last month as the cryptocurrency continues to free fall following an incredible spike, according to leading market tracker Coinable.
Meanwhile, Ethereum, Ripple, Litecoin and Bitcoin Cash have all experienced downward trends.
Sources in Congress have stated that the hearing will be a “fact-finding exercise” that will discuss the power of the two bodies on cryptocurrencies.
The meeting is also believed to discuss ways in which investors in virtual currencies can be protected.
The SEC has argued that those putting their money in initial coin offerings (ICOs) should be subject to the same failsafe precautions as equity market offerings.
Both Mr Clayton and Mr Giancarlo will suggest that the current regulatory system’s patchwork to cater to the rise in prominence of cryptocurrencies should be altered.
The CFTC has stated that it lacks the ability to regulate Bitcoin Cash – Mr Giancarlo explained that a licensing regime for Bitcoin Cash could prevent fraud and money laundering.
Back in December, Bitcoin hit an all-time high of £13991.86 ($19,535.70) on December 17 before sharply declining.
A brief resurgence of the cryptocurrency occurred on January 6 when the value hit £12,201.24 ($17,035.60) before dramatically going into free fall.
Today the Bitcoin market opened at 5866.06 ($8,186.65) and closed at £4,717.78 ($6,583.56) that marked another sad day for cryptocurrency investors.
Bitcoin continued its spiral downwards after some banks banned their customers from buying it with credit cards.
In addition to worries from the US, India is also being touted as another country that could introduce crippling cryptocurrency regulation.
New Delhi’s economic affairs secretary, Subhash Chandra Garg, stated that the government is setting up a panel to analyse cryptocurrencies and aims to submit a report on them in the current fiscal year.
He explained: “The government will take steps to make it illegal as a payment system. As well as having a regulator in place.
“We hope now within this financial year the committee will finalise its recommendations… certainly, there will be a regulator.”