Bitcoin made it big, now it has Uncle Sam’s attention
Bitcoin and other similar cryptocurrencies may not be able to remain free of government regulation much longer if lawmakers follow through with their plans to begin investigating the industry. In a letter to Homeland Security Secretary Janet Napolitano, Thomas Carper (D-Del.) and Tom Coburn (R-Okla.) recommended the department engage in an inquiry in this emerging space in order to determine what policies and procedures, if any, need to be enacted.
Many investors flock to Bitcoin because it is an unregulated, digital currency that operates freely from traditional financial institutions, but this inquiry may soon lead to actions that restrict those freedoms. In the letter, Senator Carper and Coburn wrote: “Virtual currencies appear to be an important emerging area” and ““demands a holistic and whole-government approach to understand and provide a sensible regulatory framework.”
No more flying under the radar
After flying under the government radar for so long, this is one of the few times that the government has made it known that it plans to regularly keep apprised of this space; the Department of Homeland Security reached out to various other departments as well, including the Department of Justice, the Federal Reserve, Department of Treasury and the Securities and Exchanges Commission.
On Monday, the New York Department of Financial Services also subpoenaed 22 companies known to be heavily involved in the Bitcoin space in order to determine what government regulations are missing from this space that are present for other financial institutions.
Cryptocurrencies still hot, but may get a tad cool
For new investors looking to become involved with Bitcoin and other similar cryptocurrencies, it may become more difficult to enter this arena as talks on regulating this market start to increase. The Homeland Security Committee has asked the administration to provide it with details regarding any “policies, procedures, advisories….plans or strategies regarding virtual currencies,” therefore it is apparent that it plans to give this a serious review.
As things progress, the investor community will stay tuned for next steps and see if other government departments respond in favor of the proposed investigations.