The cryptocurrency markets are still very new and have yet to become regulated by prominent regulatory authorities such as the SEC and CFTC. Therefore, with no protective measures in place, price manipulation is rampant in the cryptocurrency markets.
An End to Crypto Price Manipulation?
However, on December 6, 2018, two US congressmen, Darren Soto and Ted Budd, have presented legislative filings designed to eradicate price manipulation in the crypto markets. They titled the two pieces of legislation the “Virtual Currency Consumer Protection Act of 2018” and the “U.S. Virtual Currency Market and Regulatory Competitiveness Act of 2018.”
Both of the bills provide a set of measures that prevent cryptocurrency price manipulation and will propel legislators, and the designated commissioners to take action with the adoption of preventative price manipulation techniques. The legislation filings present an opportunity for the US to maintain their position as a global leader in fostering innovation and to become a leader in the cryptocurrency industry.
As stated in the official press release, Soto and Budd said:
Virtual currencies and the underlying blockchain technology have a profound potential to be a driver of economic growth. That’s why we must 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. This bill will provide data on how Congress can best mitigate these risks while propelling development that benefits our economy.
Combating Crypto Price Manipulation
These two bills urge the US Commodity Futures Trading Commission (CFTC) and other US financial regulators to take action in coming up with a viable plan to regulate the crypto markets and protect market participants. Additionally, they urge the CFTC to develop regulatory measures that protect both consumers and businesses involved in the cryptocurrency industry.
The first proposed bill, the Virtual Currency Consumer Protection Act, is calling on regulators to research how crypto price manipulation happens and how to prevent it through regulatory changes.
As for the second bill, the U.S. Virtual Currency Market and Regulatory Competitiveness Act, it asks regulators to conduct research on how other jurisdictions from around the world are dealing with regulating cryptocurrencies. The goal of this bill is to gather viable information and use it to implement regulatory changes in the US.
As mentioned before, the CFTC will play a key role in carrying out the ideals set forth in these bills because they can provide clarity regarding the legal aspects of this industry.
For instance, the CFTC will clarify the classification of virtual currencies, they will analyze the viability of new rulings and they will suggest new regulatory structures for crypto exchanges, market supervision and protection of consumers.
The Push for Crypto Regulation in the US
The release of these new crypto and blockchain related bills have long been awaited and won’t stop now. Besides the bills mentioned here, another US congressman is pushing for a new bill to exempt ICOs from securities laws.
Republican Congressman, Tom Emmer recently proposed 3 separate bills that support the development of blockchain technology and cryptocurrencies:
- Resolution Supporting Digital Currencies and Blockchain Technology.
- Blockchain Regulatory Certainty Act.
- Safe Harbor for Taxpayers with Forked Assets Act.
Therefore, the cryptocurrency industry is seeing a lot of development not only in terms of technology, but regarding legislation and regulation. The bear market we’re experiencing has been brutal in terms of price, but in terms of development it has never been stronger.
Do you think regulators stepping into the cryptocurrency markets is a good or bad thing for crypto? Let us know what you think in the comment section below.