Regulators are pushing to place controls on the illegal trade of Bitcoins. The concern of outlawed crypto currency public coin offering rocked the Senate of US on Tuesday.
Securities and Exchange Commission (SEC) chairman John Clayton criticized the those who are dodging SEC regulations at a Senate Bank committee hearing. "Many ICOs are being conducted illegitimately. Their participants and promoters are not abiding by our security laws," he said.
"Few of them assert that it is because they are unaware of the law," he added. Clayton alongside J. Christopher Giancarlo, chairman of the Commodity Futures Trading Commission (CFTC) also testified and answered the questions related to virtual currencies in front of members of US Senate banking committee.
As lawmakers, they emphasized on the steps they are taking to regulate the Bitcoins and other crypto currencies. They voiced their concerns as interest in currencies has boomed, and many coins had skyrocketed before a recent slump in the market.
The CFTC is currently regulating crypto currencies as commodities, but the digital forums on which they are traded have no clear regulatory measures.
According to estimates, ICOs raised nearly $4 billion last year. The SEC honcho told that they are planning to take a closer at ICOs and digital coins released by companies for raising funds. “Those who engage in semantic gymnastics or elaborate structuring exercises so that they can elope law are in the crosshairs of our enforcement provision," he added.
"People somehow thought that since it was new, it would be okay to raise money without caring much about security. I am sad to know that the gatekeepers that we rely on to make sure that our securities laws are implemented have done their job properly," he asserted.
SEC has released several statements in the past and has warned investors to take precautions so that they can avoid becoming victims of theft or fraud.
However, some of the senators on the committee expressed their keen interest in gaining a better understanding of the pros and cons of the crypto currencies and threw light on some of the advantages of blockchain technology.
Senator Mark Warner (D-VA) put his views on the table regarding the potential of Ethereum and compared the innovative approach of blockchain technology with that of the advent of wireless cellphones.