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US Congresswoman Reveals She Bought Ether and Litecoin Last Year

U.S. Representative Tulsi Gabbard of Hawaii bought litecoin and ether late last year, a recently-published financial disclosure shows.

In a Financial Disclosure Report filed on August 14, Gabbard revealed that she bought more than $1,000 in ethereum and litecoin last December. The specific amounts of each token that she bought were not disclosed, though the form noted that her holdings for each are between $1,001 and $15,000 under the “Assets and ‘Unearned’ Income” category.

Both ethereum and litecoin also appeared under the “Transactions” category, confirming that she bought the tokens on Dec. 12, 2017. Ethereum’s price reached a high of $659 and a low of $526 on that day, according to data from CoinMarketCap. At press time, it was trading at roughly $278.

Similarly, litecoin traded at a low of $230 and a high of $339 on that day, while trading at $55 as of press time.

Gabbard’s disclosure noted that she did not make capital gains greater than $200 on either token.

She joins Virginia Representative Robert Goodlatte in owning cryptocurrencies, who revealed in a similar filing that he had bought bitcoin, bitcoin cash and ethereum. In his filing, Goodlatte stated that he bought between $1,001 and $15,000 in bitcoin cash and ethereum, and more than $15,000 in bitcoin.

Goodlatte declared no income from his cryptocurrency holdings.

A request for comment to Gabbard’s office was not immediately returned.

Hat tip Neeraj Agrawal

Tulsi Gabbard image via Lorie Shaull / Flickr

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CFTC Official to Congress: Don't Be 'Hasty' With Crypto Rules

The director of the Commodity Futures Trading Commission (CFTC)’s fintech initiative cautioned against what he called “hasty regulatory pronouncements” during a Congressional hearing on Wednesday.

The remarks from Daniel Gorfine, director of LabCFTC, were directed toward members of the U.S. House Committee on Agriculture which, as reported by CoinDesk, sought testimony on the issue of cryptocurrencies and digital assets. Alongside Gorfine were former JPMorgan blockchain lead Amber Baldet, former CFTC chair Gary Gensler and A16Z managing partner Scott Kupor.

Gorfine framed his remarks from the perspective that many different things can be considered “commodities” – but not all of them would warrant attention from U.S. regulators.

“It’s only when we start to see the rise of futures or swaps products built on those commodities that we have kind of direct oversight,” he remarked, going on to state:

“We all have the shared goal to bring clarity and certainty to the market but [we] also need to be sure that we are thoughtful in our approach and do not steer or impede the development of this area of innovation. Indeed, while some may seek the immediate establishment of bright lines, the reality is that hasty regulatory pronouncements are likely to miss the mark, have unintended consequences, or fail to capture important nuance regarding the structure of new products or models.”

Gorfine would return to that point several times during the hearing, which began at 10 a.m. local time.

“It’s important that we’re not hasty in figuring out what the contours are of applying securities law and then the commodities framework,” he remarked.

Congressional sentiment

The hearing notably provided a window into what some members of Congress think when it comes to the subject of cryptocurrencies – though it wasn’t positive in some cases.

For example, Rep. Collin Peterson remarked that, in his view, much of the cryptocurrency ecosystem “seems like a Ponzi scheme” and asking “what’s behind this?”

It was Gensler who offered a response, stating that “there’s really nothing behind gold either … what’s behind it is a cultural norm, for thousands of years we liked gold.”

“We do it as a store of value, so bitcoin is a modern form of digital gold. It’s a social construct,” he continued.

In other cases, committee members simply wanted more information on how cryptocurrencies exactly work.

“We’re creating another money supply here as I see it. I just don’t know how that works. Our dollar sets the mark for the world. I can’t visualize how this would work,” Rep. Rick Allen commented.

But it was Michael Conaway, the chairman of the committee, who perhaps had one of the most notable – and telling – remarks about bitcoin, coming at the very end of the hearing and just days after the U.S. Justice Department claimed it had traced bitcoin transactions conducted by 12 Russian intelligence officers accused of hacks during the 2016 presidential election.

“As long as the stupid criminals keep using bitcoin it’ll be great,” Conaway quipped.

Want to read CoinDesk’s full by-the-second coverage of the hearing? Follow our stream on Twitter here

Daniel Gorfine image via House Agricultural Committee

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What to Expect When Congress Talks Crypto (Twice) Tomorrow

It’s a crypto doubleheader on Capitol Hill tomorrow.

Two U.S. House of Representatives Committees will be hosting hearings on Wednesday to look at the topic from two distinct angles.

The House Committee on Agriculture will focus on the emergence of “digital assets” while the Financial Policy Subcommittee hearing will examine “the extent to which the United States government should consider cryptocurrencies as money,” as previously reported.

According to new information published Tuesday, the Agriculture Committee hearing will notably see former JPMorgan blockchain lead and current CEO of Clovyr Amber Baldet, former Commodity Futures Trading Commission (CFTC) chairman Gary Gensler and Andreessen Horowitz managing partner Scott Kupor, among others, testify.

“This hearing will shed light on the promise of digital assets and the regulatory challenges facing this new asset class. Our committee has a deep interest in promoting strong markets for commodities of all types, including those emerging through new technology,” Rep. Michael Conaway, chairman of the committee, said in a statement.

By contrast, the Financial Services hearing seems to be tackling the broader question of what cryptocurrencies are exactly. According to a memo detailing the hearing’s goals, members “will evaluate the merits of any uses by central banks of cryptocurrencies, and discuss the future of both cryptocurrencies and physical cash.”

As of press time, none of the committee members contacted by CoinDesk responded to requests for comment, leaving the question of sentiment around the topics an open one ahead of the hearings.

Yet as for what those tuning in can expect, one might want to refer to the last few times Congress tackled the subject.

Back in March, for example, a hearing on initial coin offerings – likely to emerge during the testimonies tomorrow – saw lawmakers argue for greater protections while Representative Tom Emmer called for more regulatory restraint. A hearing in May saw lawmakers discuss the “almost limitless” applications of the tech, to borrow a phrase from one Department of Homeland Security official.

Luckily for those hoping to follow the action, the hearings – which will be live streamed – are spaced out throughout the day. The Agriculture Committee’s gathering is set for 10 a.m. EDT, with the Financial Services Committee’s hearing scheduled for 2 p.m. EDT. B

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House Rules Politicians Must Disclose Crypto Investments Above $1K

Members of the House of Representatives, the lower chamber of the U.S. Congress, must begin disclosing cryptocurrency investments that exceed $1,000.

The guidance was laid out in a June 18 memo drafted by the House Ethics Committee. According to the memo, the committee determined that cryptocurrencies are “other forms of securities for purposes of the EIGA (Ethics in Government Act) and financial disclosure with respect to individuals who are subject to financial disclosure requirements and who file their reports with the Clerk of the House.”

It’s a notable determination and one that was issued on the same day that the Office of Government Ethics (OGE) – the ethical watchdog of the federal government – said in its own guidance release that public officials must disclose their crypto-holdings. The House memo was first reported by Bloomberg.

Whether this policy will extend to the Senate, the upper chamber of Congress, remains unclear. A representative for the Senate Ethics Committee was unavailable for comment.

Notably, the document also touches on initial coin offerings (ICOs) or token sales. As it stands, the committee said that “it is unclear which ICOs, if any, may be considered to be ‘the subject of an initial public offering’ for purposes of the IPO prohibition.”

As a result of the STOCK Act, members of Congress are prohibited from taking part in any kind of special-access security offerings that aren’t extended to the general public.

“Accordingly, any House Member, officer, or employee who is considering participating in an ICO is strongly encouraged to contact the Committee for guidance before doing so,” the memo states.

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What to Expect When Congress Talks Blockchain Tuesday

A pair of Congressional subcommittees will continue their fact-finding mission on blockchain during a hearing tomorrow.

Tomorrow’s session will be more narrowly focused compared to a similar hearing held by the House Committee on Science, Space and Technology’s Research and Technology and Oversight Subcommittees in February.

While that event cast a broad net – covering blockchain applications beyond the realm of cryptocurrencies – the one on Tuesday will hone in on the tech’s use in supply chain management.

A representative for Lamar Smith, the chairman of the House Science Committee, told CoinDesk that the hearing will host “experts in intellectual property, cybersecurity, as well as shipping and logistics.”

These include Douglas Maughan, who serves as the cybersecurity division director for the Department of Homeland Security’s Science and Technology Directorate; NUBY Law PR counsel Robert Chiaviello; Michael White, who serves as head of global trade digitization for Maersk; and Christopher Rubio, the vice president of global customs brokerage staff for UPS.

It’s this group, press secretary Brandon VerVelde says, that will help steer the committee’s thinking on blockchain’s use in this area.

“The committee has an interest in supply chain risk management (SCRM) through our jurisdiction over the National Institute of Standards and Technology, or NIST, which has worked extensively on SCRM,” VerVelde said, adding:

“This hearing is intended for information-gathering for the committee members. We look forward to learning a lot from the witnesses.”

Indeed, those hoping for the kinds of fireworks seen in February when the heads of the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) hearing before the Senate Banking Committee – or during a House hearing on initial coin offerings in March – will likely be disappointed, given its info-gathering nature.

What lawmakers are saying

Rep. Roger Marshall, in a statement to CoinDesk, referred back to the Science Committee’s past work and framed tomorrow’s gathering as a continuation of that process.

“This hearing will build upon the previous one, which explored the science behind blockchain technology. I know the intent of the hearing is to be informative but look forward to seeing where the discussion will go and the questions my colleagues ask,” he said.

According to Illinois Representative Randy Hultgren, the conversation will focus in part on how the tech can solve issues around intellectual property theft – a potential hot-button issue considering the Trump administration’s recent statements on IP theft by the Chinese government.

“This hearing will help examine how new technologies are improving the ways in which consumers can be better informed about where their products are coming from, how companies can validate a secure, ethical supply chain and how U.S. intellectual property can be better defended against unlawful practices,” Hultgren said in a statement.

That push for transparency – particularly on the front of counterfeit goods – is highlighted in the hearing charter published ahead of the event.

“The hearing will focus on how this technology can be leveraged to provide greater supply chain visibility and combat the distribution of counterfeit products,” the document states.

Congress image via Shutterstock

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SEC Official Defends 'Balanced' ICO Oversight in Congress

A U.S. Congressman called for a ban on initial coin offerings (ICOs) during a hearing on Thursday.

William Hinman, the director of the Securities and Exchange Commission’s Division of Corporation Finance was speaking before the House Financial Services Committee’s Capital Markets, Securities, and Investment Subcommittee, and had remarked that in regards to cryptocurrencies and ICOs, his division is “striving for a balanced approach.”

But Rep. Brad Sherman (D-Calif.) argued against that line of thinking, asserting that token sales are detrimental to the economy.

“The reason for securities markets is to provide jobs in the real economy,” Sherman remarked. “An IPO [initial public offering] does that, an ICO does the opposite. It takes money out of the real economy.”

When Hinman began to argue that the blockchain technology that underpins ICOs “may have some promise,” Sherman cut him off:

“I’m not saying ban blockchain, I’m saying ban the ICOs.”

Hinman, in turn, pushed back by saying: “Some folks are finding that the ICO instrument allows for a different type of enterprise, one that’s more decentralized, and which they think has some value.”

During his opening remarks, Sherman struck a critical tone toward bitcoin in particular, remarking that “bitcoin is a security in that it is an investment.”

It’s a notable comment, given that it’s one that the SEC is unlikely to agree with – Hinman’s boss, SEC chairman Jay Clayton, suggested in November that while ICO tokens likely qualify as securities, bitcoin does not.

“When you depart from the bitcoin or the ethereum, and you get into the tokens, the hallmarks become pretty clear,” Clayton told the Wall Street Journal.

Speaking to CoinDesk Friday, Digital Asset Research senior analyst and counsel Matt Gertler said bitcoin does not meet the Supreme Court’s definition of a security.

“The first prong of the Howey Test is an investment of money,” he said via email. “Considering that all bitcoin was mined and not sold for money at issuance, it is unclear how bitcoin would satisfy the Howey Test.”

Not all negative

The reception to ICOs at the House subcommittee hearing wasn’t entirely hostile, however. Rep. Tom Emmer (R-Minn.) criticized his colleagues’ “ignorance about how special this area is.”

Emmer’s enthusiasm for cryptocurrencies is not new – he told CoinDesk in March that the U.S. must avoid overregulating the sector.

The lawmaker asked Hinman at Friday’s hearing if there were circumstances in which a token sale would be “something other than a securities offering.”

“It’s quite hard to have an initial sale without having a securities offering,” Hinman replied, “which is why the chairman has noted that the initial sale of these may require compliance or exemptions.”

Emmer then asked about utility tokens, which ICO proponents argue should not be regulated as securities because they are designed to facilitate the usage of a blockchain-based network, rather than act as investments.

“We certainly can imagine a token where the holder is buying it for its utility and not as an investment,” Hinman responded.

Hinman went on to suggest that the SEC would take a token’s circumstances into account, “especially if it’s a decentralized network.”

“The issues around whether a particular coin offering may be a security are somewhat complex,” Hinman told committee chairman Rep. Bill Huizenga (R-Mich.). He went on to say that his division’s goal is to “not stifle innovation.”

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U.S. Congress to Hold Blockchain Hearing on Valentine's Day

The U.S. House of Representatives has a date with blockchain this Valentine’s Day.

Two subcommittees of the U.S. House Committee on Science, Space and Technology – for Oversight as well as Research and Technology – are holding a hearing, entitled “Beyond Bitcoin: Emerging Applications for Blockchain Technology,” on Feb. 14 at 10 a.m. EST.

Appearing at the event are Walmart vice president of food safety Frank Yiannas; National Institute of Standards and Technology (NIST) director Charles Romine; IBM vice president of blockchain Jerry Cuomo; Congressional Research Service analyst Chris Jaikaran; and Benjamin N. Cardozo School of Law associate clinical professor Aaron Wright.

It’s not immediately clear if the hearing will be broadcast live, as has been the case for prior events of this nature.

The subcommittees, in particular, oversee legislative and investigative actions into the science and technology fields. Notably, the Subcommittee on Research and Technology has the power to allocate resources to developing projects. However, it is not yet clear what the goal for next week’s hearing will be.

While focusing on potential applications outside of currency, the House subcommittee event comes just over a week after the U.S. Senate Committee on Banking, Housing and Urban Affairs held a hearing with the heads of the Commodity Futures Trading Commission and the Securities and Exchange Commission.

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Florida Bill Would Legally Recognize Blockchain Signatures, Smart Contracts

A lawmaker in Florida has introduced a bill that, if passed, would create a legal foundation for blockchain data and smart contracts in the U.S. state.

House Bill 1357 introduces multiple stipulations that blockchain ledgers and smart contracts be treated as legally-binding methods of data storage – provided that such measures do not break any pre-existing laws or regulations.

Notably, the bill states that a “record or contract that is secured through blockchain technology is in an electronic form and is an electronic record,” and confirms that a signature recorded through a blockchain also qualifies as a valid electronic signature.

As a result of these qualifications, the bill outlines that, if a person uses a blockchain to secure interstate or foreign commercial ventures, it would not impact ownership rights. In other words, if someone used a blockchain ledger to store information, the bill would legally recognize that person’s rights to that information.

Similarly, the bill states:

“A contract may not be denied legal effect or enforceability solely because: 1. An electronic record was used in the formation of the contract [and] 2. The contract contains a smart contract term.”

If signed into law, the bill would make Florida the latest state to recognize blockchain records and smart contracts. Last year, Arizona passed a similar measure, with identical notes on confirming blockchain records as electronic records, as well as giving smart contracts legal force.

A slightly different bill in Vermont, when passed in 2016, allowed for the use of blockchain-based data as evidence in court.

Florida flag image via KMH Photovideo / Shutterstock

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