U.S. Crypto Regulations: Crypto Chiefs Mystifies Crypto Regulations In The U.S.A

• Six Executives from prominent crypto firms face the current politicians to clarify various aspects of the digital ecosystem.

• Maxie Waters, who chaired the hearing regarding crypto regulation is anxious regarding the fact that at least three billion users are included in Meta’s Project. The USDP can put the U.S. dollar’s position as a global reserve currency.

• Answering a question on whether FTX can be used by terrorist organisation, Bankman-Fried responed by saying that they use sanctions on its users, said “In addition to that, we conduct surveillance on the blockchain and fiat assets that transfer into and out of our system.”

A representative of West Virginia, Alex Mooney inquired to Bankman-Fried whether FTX can be used to evade U.S. sanctions by “rogue and frankly murderous autocratic regimes” 

“We run sanctions checks on all of our users and we can do Know Your Customer surveillance on them. In addition to that, we conduct surveillance on the blockchain and fiat assets that transfer into and out of our system.”, responded Bankman-Fried.

Capitol Hill acted as an host to on-going deliberation regarding the U.S. regulation of the cryptocurrency for the present politicians, this month. Six executives from prominent crypto companies describe the various aspects of the industry.

Maxine Waters, Californian congresswoman, was chairing the five-hour long hearing during which the executives bravely faced the grilling from the politicians.                                                                                                   

Charles Cascarilla,Sam Bankman-Fried,Denelle Dixon,Brian Brooks, Alesia Jeanne Haas, Jeremy Allaire and Charles Cascarilla were the six executives that took part in the hearing.

Brian Brooks has served as the CEO of Bitcoin for a brief period and also is a Former U.S. Acting Comptroller of the Currency and is now the CEO of Bitfury.

Responding to a question about whether he viewed cryptocurrency as a security, he said,“We don’t know authoritatively what’s a security and what isn’t, because no authority will tell us. But what we can do, at least, is we can tell you the difference between an R-rated asset and a PG-rated asset, and people can make their risk tolerance judgments.”

We Offer Customers Protection From Hacks: Coinbase & FTX

Former vice-president of GE Healthcare Financial, Alesia Jeanne Haas is currently the board member of ANGI Homeservices and Vimeo. 

Speaking on Coinbase, Hass said, “We now securely store 12% of the world’s crypto on our platform. This is across over 150 asset types, and we offer customers the opportunity to earn, sell, send, and to receive and buy more than 100 assets on our platform.”

Hass also highlighted the enormous use-cases of crypto and how Coinbase is the driving force behind the next phase of crypto adoption.

“We serve more than 73 million customers globally, including 10,000 institutions and 185,000 application developers. Importantly, nearly 50% of our transacting customers are doing something other than buying and selling crypto, which indicates to us that crypto has moved past its initial investment phase, and we are now in the long-expected utility phase of this ecosystem.”

Cold Wallets Vs Hot Wallets 

With only 2% of the Coinbase holdings stored in hot wallets and the rest being stored in cold wallets, there is higher-risk of direct attacks associated with the cold wallets that are not on the platform. Security breach is more likely to happen to the Hot wallets since they are always present online. Although Coinbase protects its customers from the hacks, it couldn’t lend any help in the case of an account takeover.

A Physics Ph.D holder, and the current CEO of FTx, Sam Bankman-Fried, in relation of FTX with law enforcement said, “We are responsive to law enforcement inquiries constantly. Around this, we are helpful whenever we can be with the terms of information related to FTX and our users.”

Pro-Regulation

Charles Cascarilla, CEO and co-founder at Paxos, a New York-based company specializing in blockchain and focuses on the movement of digital currency, said , “We have an opportunity to build a more efficient and effective financial system. We believe a primary prudential state or federal regulator should regulate digital asset companies and their products… Regulation must ensure that customer assets are segregated from the company’s balance sheet for stablecoins.”

Jeremy Allaire is the co-founder and CEO of the second-largest issuer of Stablecoins in the world, Circle.In a interview given to CBNC in June 2021, said “The internet needs native forms of currency and native forms of digital money.”

Should Meta Dollar Be Threatened By Meta’s Novi Wallet?

Maxie Waters also addressed the partnership of Cascarilla and Paxos with Meta, a company behind Facebook, Whatsapp and Instagram and owned by billionaire, Mark Zukerberg. The collaboration between the respective parties is for the Novi pilot in parts of the U.S and Guatemala and it aims to allow cheap and fast payment between Guatemala and a certain U.S states. 

The money is first loaded into a digital novi wallet, which is then converted into a cryptocurrency. The cryptocurrency is known as Pax Dollar (USDP), a type of stablecoin. 

For withdrawal or deposit into a local bank, the Novi wallet converts the cryptocurrency into the local currency in the sender’s or receiver’s wallet.

At least three billion users are included in Meta’s Project is what concerns Waters. The USDP holds the potential to threaten the status of the U.S. dollar’s status as a global reserve currency.

Cascarillas observed, “Novi would be best positioned to talk about their plans to expand it. But right now, they’re in a pilot phase. It’s just the U.S. and Guatemala; it’s quite limited in scope and size.”

What Are The Crypto-Regulations Against Terrorism?

A representative of West Virginia, Alex Mooney inquired to Bankman-Fried whether FTX can be used to evade U.S. sanctions by “rogue and frankly murderous autocratic regimes” 

“We run sanctions checks on all of our users and we can do Know Your Customer surveillance on them. In addition to that, we conduct surveillance on the blockchain and fiat assets that transfer into and out of our system.”, responded Bankman-Fried.

Mooney has been at the forefront of financial regulation, he has served as the security committee on Financial Services. Despite his appreciation on the innovations of the crypto world, he focused mainly on its potential to fund the terrorist groups. He pointed out the recent cryptocurrency donations to Hamas.

“First, what are exchanges doing today to both ensure that consumers are protected from hacking and theft? And prevent bad actors such as Hamas and other terrorist organizations from accessing cryptocurrency markets?”

Bankman-Fried said, “We work cooperatively with law enforcement here in the United States and globally. On you tracking down any bad actors, we are in constant communication.”