In a recent report, one of the key members of the House Financial Services Committee, Bill Huizenga, explained that Congress needs to act to protect crypto investors.
But, according to Huizenga, how cryptocurrency will be classified by Congress is presenting a real challenge. He told Business Insider: “Everyone’s trying to figure out whether it’s fish or fowl. It turns out it might be a platypus. It’s kind of an unknown, or something sort of in between. How do we deal with that?”
Bitcoin as a Platypus
The concept that Bitcoin and other cryptocurrencies are a platypus isn’t that new of a concept, and not that far out of left field. And while it may sound funny to say, as explained by Forbes, cryptocurrency and the platypus share one major feature, when they were first discovered, no one knew how to classify these beasts.
Cryptocurrencies take a lot of characteristics from other forms of assets (like stocks, securities, cash, etc …) but doesn’t seem to fit squarely inside any one form in particular. As Representative Huizenga recognized, nevertheless, transparency and security are needed for the public, and the first step is correctly classifying this new-ish financial product.
In addition to the issues with how to classify cryptocurrencies for regulatory purposes, the Senate has been investigating the impact of cryptocurrencies on campaign finance.
Current Crypto Enforcement
While some cryptocurrencies focus on transparency and decentralization, others seek to offer users anonymity. Unfortunately, regardless of the promises, the industry’s reputation is not that great. It is marred by scammers, failed ICOs, as well as SEC and even IRS crackdowns.
And while the SEC and DOJ seem to be playing some role, they’re left to play it by ear until Congress passes some sort of comprehensive regulatory scheme to protect the public from the currently unchecked market of cryptos.