By Olga Kharif & Lily Katz
Bitcoin rose for the first time in six days, snapping a losing streak that had helped push overall losses in digital currencies to about $500 billion, as the top U.S. market cops said they possessed all the authority needed to regulate and risk appetite returned to financial markets.
Prices steadied as Securities and Exchange Commission Chairman Jay Clayton reiterated in a Congressional hearing that he believes every initial coin offering hes seen is a securities sale and the agency already possesses the regulatory oversight needed for enforcement.
It was great for the space, said John ORourke, chief executive officer of Riot Blockchain Inc., which invests in cryptocurrency and blockchain startups. They dont want to do anything to hamper the development of this technology.
Lawmakers may still need to to pass legislation that gives agencies jurisdiction over Bitcoins spot market and the online platforms that digital coins trade on, Clayton and Commodity Futures Trading Commission Chairman J. Christopher Giancarlo said during the hearing.
The selloff had knocked about half a trillion dollars from digital coins since early January. Thats shaken a nascent market whose core attraction — anonymity and decentralization — is being challenged as never before by regulators.
Tuesdays U.S. hearings follow comments from Bank for International Settlements General Manager Agustin Carstens that theres a strong case for authorities to rein in digital currencies and that central banks — along with finance ministries, tax offices and financial market regulators — should police the digital frontier.
Novel technology is not the same as better technology or better economics, Carstens said in a speech in Frankfurt. He said Bitcoin may have been intended as an alternative payment system with no government involvement, yet it has become a combination of a bubble, a Ponzi scheme and an environmental disaster, in reference to its electricity use.
This article has been published in collaboration with Bloomberg|Quint.
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