Hearing of US regulators: comments by legal counsel Coinbase

Representatives of the Subcommittee on Capital Markets, Securities and Investments of the United States attended the Examining Cryptocurrencies and ICO Markets hearing, which took place on 14.03 in Washington. They discussed cryptocurrency and ICO, possible benefits and advantages from the economic point of view, support of investors by lawyers and development of regulatory approaches that are applied by the regulatory bodies of the United States.

Michael Lempers, representative of Coinbase, leading legal consultant and expert on risks associated with cryptocurrency wallets and exchange of cryptocurrencies, noted that: "Digital currency technologies affect the process of capital formation, innovative solutions and the economy, and they haves huge potential, if responsibly regulated."

To date, the US regulatory system has no clear idea ofwhat to prohibit and what can be allowed, and it is also not possible to state exactly what should becryptoassets (either goods or securities or money).

Mike Lempers sets himself the goal of providing clients with a guarantee that uncertainty of the regulatory bodies will not have a detrimental effect on possible benefits of using innovative technologies.

Legal counsel also adds that the Securities and Exchange Commission (SEC) identifies cryptocurrencies as securities, and the Commodity Futures Trading Commission (CFTC), which monitors transactions with derivatives, treats a token as a commodity or good. The Financial Crimes Enforcement Network (FinCEN) has all powers for KYC and AML and refers to cryptocurrency as to monetary funds, and the Internal Revenue Service (IRS) suggests taxation ofcryptocurrency. "All above is an indicator of inadequate coordination," Mike Lempersnotes.

Legal counsel was asked on the part of the Subcommitteewhether Coinbase could support and maintain ICO before the regulatory rules were adopted. Mike Lempers replied in the negative way: "To date, Coinbase does not support and maintain ICO, because there is no certainty in regulatory framework. After the CFTC and the SEC come to a common solution, we will participate in the assistance for some ICO projects".