Conclusions on Cryptocurrency Regulation

Abstract

This Conclusion summarizes governmental efforts seeking to regulate cryptocurrencies that are covered in this Primer. They include the first tentative endeavors to provide consumer protection from widespread fraud in the cryptocurrency market through investor alerts. After that attempt proved unsuccessful, financial service regulators began applying their existing regulations to cryptocurrencies by variously labeling this new asset class as “money” that is subject to money transmitter regulations, then as a “security” regulated under the federal securities laws and as a “commodity” regulated by the Commodity Exchange Act of 1936. None of those labels was a good fit for cryptocurrencies. The validity of those regulatory efforts also remain uncertain in light of the “major questions doctrine” that requires congressional action when the regulatory authority of an agency is not clearly defined. The Primer concludes with an analysis of the legislation that is needed to regulate cryptocurrencies effectively.