As the global investment frenzy over cryptocurrencies continue to increase, US lawmakers are now considering new rules that could impose stricter federal oversight on the emerging asset class, Reuters reported.
Several top lawmakers told Reuters that bipartisan momentum is growing in the Senate and House of Representatives for action to address the risks posed by virtual currencies to investors and the financial system.
According to the report, even free-market Republican conservatives, normally wary of government red tape, said regulation could be needed if cryptocurrencies threaten the US economy.
“There’s no question about the fact that there is a need for a regulatory framework,” said Republican Senator Mike Rounds, a Senate Banking Committee member as per the Reuters report.
At the moment, digital assets fall into a jurisdictional gray area between the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Treasury Department, the Federal Reserve and individual states, said Reuters.
Most of the concern Capitol Hill has is focused on speculative trading and investing in cryptocurrencies, leading some lawmakers to push for digital assets to be regulated as securities and subject to the SEC’s investor protection rules.
“The SEC is properly the lead on the issue,” said Republican Representative Bill Huizenga, chairman of the House Financial Services Subcommittee on Capital Markets which will hold hearings on the issue in coming weeks.
According to Huizenga, the recent growth of the virtual currency market had made him more comfortable with more oversight. “Six months ago, we didn’t see this explosion. The marketplace has changed,” he said.
Speculation in virtual currencies has recently ballooned, along with scams promising investors returns of over 1,000 percent in weeks, reported Reuters.
In a time of volatile markets, hackers are also active in the sector, stealing $530 million of digital currency from Japanese exchange Coincheck last month.
Bitcoin lost over half its value earlier this year after surging more than 1,300 percent.
“We have to look carefully at all of the cryptocurrencies and make sure individuals don’t get taken advantage of,” said Representative Tom MacArthur, a House Financial Services Committee Republican to Reuters.