Bitcoin will be destroyed in 2018?

by Paulius K.
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Bitcoin may be a systemically risk to EU government.

Today we're going to talk about the Bitcoin Senate committee hearing were SEC chairman J. Clayton and CFTC chairman Chris John Carlo testified on crypto currencies.

Many news outlets in content creators reported on this event as a very positive and bullish sign for Bitcoin which makes me almost wonder whether or not I watch the same hearing before I watch the hearing though I read the ten page written statements from both chairman Clayton and chairman John Carlo and there were some very consistent themes that we should be prepared for.


When they unravel first of all SEC chairman clean very clearly views all as a securities and believes they should be regulated as such.

This isn't a new or particularly controversial standpoint but let me continue before you rush down to the comments section this is not only the primary focus of his written testimony but you can also see in the hearing how frequently he touches on the issue it was also fairly easy to tell from his tone of voice and demeanor that generally discussed him:

Speaker 1: “And I'm very unhappy the people are conducting ICO’s like public offerings of stock when they should know that they should be following the private placement rules unless they're registering with us those two things make me unhappy would figure out how to deal with them It is why we're here. I think I agree with you that we should be careful not to go too far.
But for me in the just to be clear for me in this ICO space it's pretty clear that when people are violating our securities laws work pretty well disclosure can be improved it can really be a threat.”

To him ICO’s are attempting to achieve all the benefits of both public offerings and private placements which is all right a legal and then arguably scummy as well even when done by quote on quote legitimate people know that even the CFTC chairman John Carlo who appears to be a big point bowl was stored on ICO’s many of the senators also seem to agree that I ICO’s are problematic now up until this point you might even be nodding your point is well because you agree with them most I CIOS have not been done properly at best in our outright scams at worst but here's a detail you may have missed from the testimony SEC chairman Clayton's written testimony detail how crypto currency exchanges have money transmitter licenses but aren't regulated as securities exchanges and hence aren't subject to a number of factors like a minimum level of cyber security and capital reserve requirements he also made clear that he doesn't like how many consumers trust these custodians despite the lack of regulations.

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He noted that that the money transmitter licenses warrant designed for this type of secondary market trading and that wall AML and KYC requirements will help prevent some forms of crime is intended by Finsen they don't protect consumers all that well.

However, the SEC really doesn't have much authority in this area for as long as crypto currencies aren't teams’ securities. Now let's take this information and connect the dots if the SEC teams all ICO’s are securities will there be any retroactive ruling applied China sort of went this route and it killed many projects the important ramification of them retroactively applying this rule would be that many existing all coins could become labeled as securities now take a moment and think about what that could mean what happens to an exchange like bit tracks especially now that they want to introduce US dollar trading which has many different crypto currencies listed. Will the SEC explicitly state which all coins or securities or will it provide guidelines that businesses boss follow and then enforce any violations against those guidelines will have forms like a therian be targeted as they help first place both the written testimony and the hearing itself touched on the idea of the crypto currency exchanges are not adequately regulated which could suggest restrictions in the future if all coins start becoming defined as securities there were some other warning signs as well that many people seem to ignore it. Was fairly obvious that SEC chairman Clayton doesn't you pick one in high regards he avoided touching on the coin too much likely because it is in a security and because he wanted to focus on ICO’s but he wasn't afraid to claim how he felt regarding it is lack of usefulness and its inability to be an acceptable substitute for the dollar here's yet another clip that demonstrates that.

Speaker 1: “The lot of smart people who think there's something to the value of the crypto currency in the international exchange and I'm not I I'm not seeing those benefits manifesting themselves in the marketplace yet and from the perspective of a guy look at this inspector of protecting main street investors they should understand that. That the funny thing about the script of currencies is they only work if they're integrated with the only work for their purported purpose if they're integrated with the financial system and so therefore it necessarily touches on all of our regulations.”

I would be willing to bet money that he is someone that behind closed doors thinks that big one is more a fad than anything else it's worth nothing too that this is how big one was frequently defined in the hearing as a substitute for the U. S. dollar this is not how we want regulators to view Big point at this stage because it warrants a much stronger response one of the senators very clearly illustrated his distaste for crypto currencies as he felt that it undermined sovereigns and fiat currencies.

Speaker 2: “And I would just say to both of you it to the extent that you have a role to play and you lack the present authorities to do so I would love to know about that if you determine that is necessary because all I get is my sense of crypto currencies largely driven to evade US sanctions and to undermine a sovereign currency it both of them are challenged to the national interests of the United States.”

It's also worth noting that if SEC chairman Clayton doesn't have a positive opinion on big points which he doesn't seem to have that likely won't speed along the process of the first big pointy teeth he reiterated the SEC's prior statements on both his written and spoken testimony regarding numerous concerns surrounding the product including liquidity security consortiums ship arbitrage.

So forth as a result I think we can expect it to be a long time before a big one ETF hits the streets now moving on to the next concern senator Warner had some very positive remarks on crypto currencies notably that he felt block chain in the currencies themselves warrant necessarily separable. Unfortunately he followed up with the idea of escalating crypto currencies like big point the financial stability oversight council now is responsible for evaluating factors which could affect systemic risk warn, other words it is attempting to prevent the next two thousand eight type of crisis naturally would not be good for big point to be considered a systemic risk especially given the fact that the chairman about stock is the US treasury secretary AKC munition who recently went on record saying that he doesn't want bad people doing bad things with crypto currencies which isn't often cited reason for regulation and oversight he's yet another character I wouldn't exactly characterize as being a coin friendly.

Another common theme throughout the meeting was that aside from CFTC chair John Carlo and senator Warner the primary reason behind wanting to regulate with a do no harm approach was to allow block chain to continue to develop not big point and I think this is a very important distinction because we've seen historically that both politicians and regulators are concerned with the use of big point in illicit activities this means that we could see a situation in which regulators target public block chains big point in other crypto currencies but leave enterprise block chain.

This is further reinforced by the fact that the SEC chair Clayton and CFTC chairman John Carlo both agreed that block chain could be a way to improve regulatory oversight as it would increase the transparency of data.

Note that the focus is not on decentralization.

Speaker 1: “On how to better help the government have.”

Even more regulatory authority naturally this always starts out with good intentions but will end up usually being an invasion of privacy in the name of law enforcement.

I think that many view the hearing as exceptionally bullish for really two reasons one is because CFTC John Carlo clearly wants to pick one to have a chance, two is because the market was down and people were desperate to hear good news however many choose to ignore the sentiments of SEC chairman Clayton and several of the other senators as detailed in video.
It's very easy to view news with rose tinted glasses especially when you are invested in whatever that news is about it is your responsibility as an investor to remove your bias prior to hearing new information so that you can process it.

Lastly I want to be clear and say that the meeting was certainly not bearish for ICO’s or Bitcoin but there were many sentiments in the hearing that most ignored that I felt should have been discussed a little bit more: the bullish elements of the Senate hearing have been covered on many different media outlets and on here on YouTube so that's the main reason I've chosen not to discuss them. Obviously there were some golden moments like John Carlo talking about hobbling and respecting the sentiments of our younger generation with a thoughtful regulatory approach I'm just not certain how thoughtful that approach will end up being given that John Carlo seem to be mostly alone in that opinion for big point specifically rather than the block chain like everybody else. In other words, he was somebody that really seem to say we should be thoughtful about our regulations for big point and block chain not just block chain and it seems like everybody else is really just focused on block chain.

Do your own research and do not trust any who say, that all goes to the MOON.

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