According to foreign media today, the House Financial Services Committee plans to ask the Securities and Exchange Commission (SEC) a series of questions such as cryptocurrency and Facebook's Libra project next week.
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According to a calendar notice on the House website, the committee will hold a hearing at the office building of the Rayburn Building on September 24th. The hearing will be attended by SEC Chairman Jay Clayton and Commissioner Robert. Robert Jackson, Elad Roisman, Allison Lee and "Encryption Mom" Hester Pierce attended.
The hearing will cover SEC actions around the cryptocurrency field, as well as private and public markets; information disclosed by listed companies; enforcement; and fiduciary responsibility.
Although the announcement did not specify which areas the committee might focus on, it did point out that the SEC used the three aspects of the Howey test to publish an analysis of whether the token was an investment contract, including exchange trading. The general definition of funds (ETFs).
The notice stated:
“Exchange-traded funds (ETFs) are a type of investment company that can be redeemed by a fund like a mutual fund, but also allows investors to trade at market prices throughout the day.”
“If an asset is an investment company and is not exempt from registration, it must comply with regulations designed to minimize conflicts of interest, including regularly disclosing its financial status and investment policies to investors.”
The SEC is currently reviewing two Bitcoin ETF proposals submitted by Bitwise Asset Management and Wilshire Phoenix (VanEck and SolidX withdrew their third ETF proposal earlier this week).
Libra is worrying
The notice also covered Facebook's Libra encryption project, which was first announced in June 2019. Libra, as expected, will play the role of a stable currency, supported by a basket of global currencies, currently including the US dollar, the euro, the Japanese yen, the British pound and the Singapore dollar.
The cryptocurrency will be supervised by a 100-member board of directors, 28 of whom have signed a temporary accession agreement (notably, Facebook and its subsidiary Calibra are two of them). The Libra Association is headquartered in Geneva, Switzerland, but the chairman of the Financial Services Commission, California Democrat Maxine Waters, is uncomfortable with the plan.
Thursday's notice hinted that Libra's tokens may be affected by securities.
Libra Investment Token may be equivalent to a security because it is intended to be sold to investors to pay for startup costs and to provide them with dividends. Libra's token itself (Libra) may also be a security, but Facebook does not intend to pay dividends, and it is unclear whether investors will have "reasonable profit expectations." However, Libra's issuance can be integrated into the Libra Investment Token, so both are considered to be securities. ”
The conclusion of the notice is:
“Like the ETF, Libra will be redeemed by certain authorized resellers and traded on the open market.”
In July of this year, the US House Financial Services Committee held a hearing on the Libra issue, and just the day before, the US Senate Banking Committee also held a hearing. At the time, lawmakers asked David Marcus, the head of the Facebook blockchain, Calibra's chief executive, on how the project would work, whether it would affect the US or global economy, and other worrying areas. question.