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U.S. former Representative Harold J. Ford said Congress should change its approach towards cryptocurrencies with new regulations. Ford explained that lawmakers should create clear regulations in order to create a predictable legal framework. This is according to an article that Mr. For wrote for CNBC.
Regulations For The Crypto Market
In this article, Ford explains that regulators should start creating clear regulations for the cryptocurrency market. Facebook, the largest social media network in the world, announced a few months ago that they are working on a cryptocurrency called Libra. However, Ford requested lawmakers to separate this initiative from the general crypto market.
The former congressman explained that due to the fact that there are no clear regulations in the crypto space innovation is being affected in the country.
There are other nations that moved forward in order to create regulations that would allow companies to settle their operations there and invest knowing they have a clear legal framework.
Moreover, investors are also protected by these regulations that establish responsibilities and also obligations.
Ford explained how the United States is currently falling behind other countries:
“The U.S. should not be losing the competitive edge on attracting this innovation’s best and brightest. The SEC now has the opportunity to take the lead on regulation that works with industry, not against it.”
Regulatory agencies in the United States such as the Securities and Exchange Commission (SEC) have been working in order to create a legal framework for crypto tokens, including Initial Coin Offerings (ICOs). Indeed, the SEC has already issued enforcement actions against several ICOs that were not compliant with securities regulations in the country.
Regarding this issue, Ford explained that there are conflicting signals in the current legislation that makes companies have a difficult situation dealing with regulations.
For example, a legal analyst noted that several digital assets don’t fit neatly into the Howe test to understand whether a token should be considered a security or not.
“This lack of clarity is already causing harm to American innovation,” says Ford. “After the SEC guidelines were issued, one legal expert argued that ‘the SEC’s position will cause smaller companies to set up shop outside the U.S.’”
Nowadays, many companies are locating their operations in jurisdictions such as Malta, Gibraltar, Jersey, Bahamas, Estonia or Japan. All of these places have already established different crypto regulations that allow firms to properly operate in the market.