Despite the recent exponential growth of cryptocurrencies, the United States government is in no rush to regulate the burgeoning industry, White House Cybersecurity Coordinator Rob Joyce told CNBC in an interview.
At the Munich Security Conference in Germany, Joyce was asked by CNBC as to whether the government was concerned about the implications of bitcoin and other cryptocurrencies being used illicitly by cybercriminals.
“We are worried,” Joyce said.
“There are benefits to the bitcoin concept – digital cash, digital currencies – but at the same time, if you look at the way bitcoin works, after there’s a criminal act that takes place you can’t rewind the clock and undo and take back that currency.
“If you have a problem with your credit card, you can go to the credit card company and they can undo that purchase and actually get your money back. With the current instantiation of bitcoin and other cryptocurrencies we haven’t figured that out yet, so it’s a problem.”
When asked specifically about how close the government is to pursuing crypto regulation, Joyce conceded that U.S. officials were still “studying and understanding what the good ideas and bad ideas in that space are.”
“I don’t think it’s even close,” he said.
The anonymity of bitcoin and other digital currencies has made the industry a desirable stomping ground for illegal activities and trading, cyber-criminals, scammers, tax evaders and sanctions avoidance.
Steps the government has taken to improve the industry
A number of the world’s central banks, and the governments responsible for them, have called for tighter regulation of cryptocurrencies in order to prevent misuse, deter anonymous trading and boost transparency.
This week, the United States’ commodities trading regulator issued a consumer advisory warning against “pump-and-dump” schemes that are becoming more prevalent among virtual currencies and digital tokens.
The U.S. Securities and Exchange Commission (SEC) has advised that cryptocurrencies and related products pose “significant investor protection issues” and, for now, cannot be offered as exchange-traded funds (ETFs).
A few weeks ago, a Senate Committee met in open session for a hearing to discuss U.S. regulators’ roles in monitoring and policing the fast-growing crypto industry, highlighting the potential for systemic effects. Additionally, the SEC’s Office of Compliance Inspections and Examinations (OCIE) highlighted the need to carefully monitor risks associated with initial coin offerings (ICOs) in 2018 as part of its annual list of priorities.
Earlier this month, the New York State Department of Financial Services (DFS) released new guidelines for all locally licensed digital currency entities to assist in preventing fraud. Meanwhile, Digital exchange Coinbase distributed end of year tax documents, via email, to U.S. customers to assist with voluntary compliance.
However, some local US governments are getting behind the crypto-craze, investing in bitcoin mining ventures.
Several leading colleges throughout the United States now offer dedicated classes examining the increasingly popular cryptocurrency industry and the still-developing blockchain technology that supports it.
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Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators’ websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.