They have talked about overview of cryptos, main purpose of regulation is to prevent fraud.

Jay Claton, SEC chair speaks first.

Total market cap of all crypto currency was estimated at $700 billion earlier this year. In 2017, ICO raised about $4 billion.

Regarding ICO

You can call it a coin, but if it functions as a security, it is a security...... Buying in an ICO doesn't necessarily mean you're investing in a blockchain venture....There are many problems.... first, there is a lot less oversight (in ICO exchanges) than traditional markets....second, many ICOs are being conducted illegally.

Regarding jurisdiction

We, the SEC and CFTC, do not have direct oversight over the market trades the true crytocurrencies...... (because)crypto does not have sovereign backing....please do not see this as a request for increased SEC oversight.

Christopher Giancarlo, CFTC Chairman is next. He talked a bit about his three kids.

I'm the father of 3 college aged kids....during their high school year, my wife and I tried to interest them by giving them a few hundreds dollars to buy stocks... they are not much interested.... well something changed last year, suddenly they were all talking about bitcoin... they were asking me what I thought and should they buy it....we owe it to this new generation to respect their enthusiasm with a balanced response, not a dismissive one....

Regarding what should be done

learn everything we can.....put things in perspective. currently bitcoin market cap is smaller than a large public traded company...educate public and consumers, do outreach... and all agencies need to work together...exercise authority over crypto derivatives. we cannot regulate the exchanges, particularly those that are international, but we can regulate futures markets... tougher enforcement over fraud....these markets are new, evolving, and international...

Q & A

On jurisdiction

Q: Should Congress consider revising law so that one agency have complete jurisdiction (over crypto market)? Do we have sufficient jurisdiction today?

A: SEC Chair: We should all come together and have a coordinated plan for the crypto market. I think the main street investors look at these crypto currency platform and assume they are regulated and as I said, we are far from that.....we may need additional legislative authorities.

A: CFTC Chair: We need to find where the regulatory gap is. As I said, the bitcoin spot market is not regulated...state regulations (on these) varies....we have patchwork here but not comprehensive structure... which is important to have.

On $4 billion ICO money raised last year

Q: How much ICO money, $4B total last year was raised in the US

A: SEC Chair: Not clear. Because it was conducted on unregulated bases.

On SEC staffing problem

Q: SEC might lose 100 of its staff. How will you stay on top of crypto developments with a diminishing staff?

A: SEC Chair: personnel is my biggest challenge at the moment. I could use more people....

On cryptocurrency value

Q: These cryptocurrencies lack intrinsic value and liquidity, comment?

A: CFTC Chair: There are some economists say there are correlation between difficulty and cost of mining and the price. I am not an expert, but what they say is there is some sort of floor.

On systematic risk

Q: We've just talked about bitcoin, but it seems it is proliferating (that there are more cryptos added everyday), It sounds like in 90s we have a relatively small derivative market, but eventually became a problem (in 2008). "

A: CFTC Chair: In term of systematic risk, right now this is still a relatively small market, but we have to watch it carefully. (he brought up ICO MyBigCoin beccomes MyBigCon as an fraudulent example);

On how to classify an ICO

Q: To SEC Chair: On ICO, what is a specific item that is subject to your review, a security in what?

A: SEC Chair: The definition of security is broad, that includes that you offer me something, a coin, I give you money and the purpose of me giving you money is for your effort to profit going forward. (Or) trade and trade after a few days. That's a security.

Funny note: CFTC Chair explained HODL to the senate banking committee. He thinks it is an acronym for "Hold On for Dear Life").

On pump and dump effort in the market

Q: There are these pump and dump efforts (in the market), could you both address what you can do about that?

A: SEC Chair: This is what I worry about that investors don't understand. When you have an unregulated exchanges, the ability to manipulate prices goes up significantly.

CFTC Chair: I mentioned we formed this virtual currency task force. We get some really good people there. We are working hard on this.

On using bitcoin as pension. (This is regarding to an article in Washington Post, "Bitcoin is My Potential Pension")

Q: What do you say to those trying to use bitcoin as a pension?

A: CFTC Chair: This is clearly troubling (he was talking about the article). If you are going to give them money, you got to be prepared to lose it.

itsok