Cryptocurrencies by George McNabb January 14, 2019
The cryptocurrency firm, Circle, recently hosted an Ask Me Anything (AMA) session on Reddit, post the successful AMA session by Gemini
In the AMA Reddit thread, Jeremy Allaire, the CEO and co-founder Circle – A Goldman Sachs-backed crypto finance company, stated that presently the crypto sector is facing the biggest regulatory hurdle due to the lack of clarity from the United States securities regulator concerning the definition of various crypto assets.
Jeremy Allaire initiated the AMA thread on January 10 along with Circle co-founder Sean Neville and other representatives from the firm.
During the AMA, a user posted his question asking “Has there been an increase in law enforcement requests to monitor crypto transactions? Do you think privacy coins like XMR will post a regulatory threat to your exchange (and others) that list them and face potential fines/sanctions?”
The Chief Compliance Officer and Head Regulatory Counsel for Circle, Robert Bench, answered saying “Absolutely. The law enforcement community (both U.S. and globally) understands that crypto, like any means of value, can be used to facilitate or fund crime. As they get smarter every day in this space, they’ll request information from firms like Circle where they think such transactions may have occurred on the platform. There’s a great deal of valuable conversation around privacy coins, and what they mean from a regulatory & enforcement perspective. One of our jobs is to educate the use for these coins (and there is certainly legitimate use cases for privacy), and on the other side build robust tools to know our customers and what they’re doing on our platforms.”
In a next question, relating to the company efforts on educating regulators like the Securities and Exchange Commission (SEC) on the crypto industry, as well as what the specific challenges were which the company was facing, Allaire answered “The biggest and most immediate regulatory hurdle we face is the lack of specific guidance from the SEC on how to classify various crypto assets. We believe many are currencies and commodities, and there needs to be more specificity on what are securities. This can unlock a lot of market activity, and also clearly enable the growth of a market for crypto-based securities.”
Later on, Highlighting the importance of regulatory clarification, Bench said, “Privacy coins get a great deal of regulatory and law enforcement attention, and rightfully so, as both Privacy and AML are two very hot topics at the moment. In short, no rules or laws have been drafted in the U.S. regarding the privacy coins, and there remains a great deal of education in the space with our partners in government on the use cases for these coins.”
Allaire also answered various other question which was on regulation and stated that the company believes that the tax treatment should differ based on the nature of the crypto transaction. Further, he gave the example of France and stated that France is the leading country concerning the adoption of such statutory compliance when compared to the other countries.
Other hot topics discussed during the AMA were discussions related to privacy-focused altcoins such as Monero (XMR), with the redditors eager to get some knowledge into Circle’s approach to handle the scrutiny from regulators and law enforcement into so-called solid blockchains.
Allaire had earlier predicted about Bitcoin’s great potential and had stated “I do not think its winner-take-all. We have the phrase ‘the tokenization of everything,’ and we think cryptographic tokens are going to represent every form of financial asset in the world. There will be millions of them in years.”