Bipartisan Bitcoin Bills to Step up Consumer Protection in the U.S.
Two United States congressmen have introduced two pieces of legislation to help prevent alleged cryptocurrency price manipulation while aiming to position the U.S. at the forefront of innovation within the digital asset industry.
Protection From Price Manipulation
The Virtual Currency Consumer Protection Act of 2018 and the U.S. Virtual Currency Market and Regulatory Competitiveness Act of 2018 task U.S. financial regulators with researching means to protect retail investors from price manipulation, while staking the global economic powerhouse’s share in the evolving financial technology.
In a joint statement, congressmen Darren Soto, a democrat, and republican Ted Budd approvingly noted the potential of virtual currencies, and the technology that powers them, to facilitate economic growth as well as the need for security guarantees for users.
The lawmakers pointed out the need to “ensure that the United States is at the forefront of protecting consumers and the financial well-being of virtual currency investors, while also promoting an environment of innovation to maximize the potential of these technological advances.”
In terms of the two bills, the U.S. Commodity Futures Trading Commission (CFTC), which regulates futures and option markets, as well as other financial regulators will make critical recommendations on fine-tuning the regulatory environment for consumers and businesses.
The congressmen observed that the bills are particularly important following concerns raised in the New York Attorney General’s recent report on cryptocurrency exchanges, showing how they are prone to the risk of manipulation. The Wall Street Journal also recently detailed potentially abusive software, whereby bots can manipulate the price of bitcoin.
The representatives said:
The Virtual Currency Consumer Protection Act directs the CFTC to describe aspects of how price manipulation could happen in virtual markets and then to make recommendations for regulatory changes that can improve the CFTC’s monitoring procedures in preventing price manipulation.
The second bill, titled the U.S. Virtual Currency Market and Regulatory Competitiveness Act of 2018, seeks to keep the U.S. at the cutting edge of blockchain technology. The bill directs the CFTC to run a comparative study of the regulation of virtual currency in other countries and then table recommendations for the U.S.
Based on the CTFC’s recommendations, the U.S. will craft for regulatory changes to promote competitiveness in the industry, with a view of providing regulatory clarity and bringing in alternatives to cumbersome regulations that may be currently discouraging innovation in virtual currencies.
“For example, it asks the CFTC to clarify the virtual currencies that qualify as commodities and examine the costs and benefits of a new, optional regulatory structure that could replace the current state money transmission system,” the congressmen explained in their statement.