Some six or seven months ago, the world’s governments likely thought that Bitcoin was on its way out, having then shed 85% of its all-time high value within the span of a year.
But now, the cryptocurrency market has returned with a vengeance, surging higher in spite of the macroeconomic environment that may traditionally be deemed detrimental for early-stage risk assets, like BTC.
Unsurprisingly, the recent resurgence in the cryptocurrency industry has resulted in a growing level of scrutiny from governmental agencies, who have now started to realize that digital assets aren’t a passing fad.
In fact, two prominent American politicians were recently cited as having said that Bitcoin is an “unstoppable force” and an “inevitability”, no matter what entities want to do to stop it.
A legendary venture capital firm, Andreessen Horowitz (a16z) has purportedly tried to address the concerns of Washington, D.C. and its counterparts across the globe, with the Wall Street Journal claiming that the fund has played host to an “alphabet soup” of regulatory agencies and key governmental bodies — the Securities and Exchange Commission, United States Treasury, Commodity Futures Trading Commission (CFTC), have your pick.
Playing Host to the World’s Regulators
Late in May, a16z, a world-renowned venture capital fund that has allocated hundreds of millions of dollars to investments in Bitcoin, cryptocurrency, and blockchain, held a closed-door meeting with officials from all across the U.S. The topic: crypto.
According to the Wall Street Journal, who cited first-hand recollections from attendees of the glitzy event, a16z tried its hand at defending cryptocurrencies. In fact, it was written in the report that the premise of the conference was to try and bridge the gap between members of the cryptocurrency industry and financial regulators.
Marc Andreessen, an early proponent of Bitcoin, said in his opening remarks that should Washington become less stringent against this budding industry, many of the Internet’s challenges would be solved, including privacy threats. Indeed, there are many in this ecosystem that claim that everything from online privacy and digital identity theft to payments fraud and plagiarism can be quelled with a crypto-based solution.
Despite these seemingly innocuous remarks, regulatory experts told the Journal that the event was “unusual”, citing the venture capital giant’s uncanny ability to have so much pull to discuss a topic that is so nascent in the grand scheme of things. Duke University’s Global Financial Markets Center executive director, Lee Reiners, said to the outlet:
“For one VC that has such a clear monetary interest in getting favorable regulatory treatment for crypto assets to host the event in a private, invite-only setting, it does strike me as unusual and untoward from a public standpoint.”
Washington Isn’t Backing Down From Crypto “Threat”
The unusuality isn’t a good thing, though. While a16z had good intentions, regulators were purportedly more hostile than amicable. Christopher Giancarlo, the former chairman of the CFTC who hilariously gained the title “Crypto Dad” during his time at the agency, warned that regulation can’t just be cast aside. And the SEC asserted that it attended the event because it needed to affirm that “our securities laws continue to apply”.
Indeed they still apply. As detailed by this outlet previously, Bitqyck and its founders were slapped with $10 million worth of fines for operating an unregistered securities exchange and making false promotions about its crypto products.
Fraud isn’t the only issue that regulators have been tackling in crypto. Some of the world’s largest countries — including the U.S. — is working on a system that will track the data of cryptocurrency transactions the world over, disallowing or making it close to impossible for bad actors to participate in crime with this asset class.