By Robert Schroeder
The chairman of a Senate committee that has held a hearing on the threat and promise of virtual currencies said Tuesday that news about bitcoin exchange Mt. Gox halting trading is “unacceptable” and suggested he’ll use the incident to renew congressional scrutiny.
“The disturbing news today from Japan is a reminder of the damage that potentially ill-equipped and unregulated financial actors can wreak on unsuspecting customers,” said Sen. Tom Carper, the Delaware Democrat who heads the Homeland Security and Governmental Affairs Committee. “U.S. policymakers and regulators can and should learn from this incident to protect consumers,” he said in a statement.
Carper held a hearing in November about virtual currencies, taking testimony from the Treasury Department, Justice Department and Bitcoin Foundation lawyer Patrick Murck. The value of the currency soared during the hearing on the Mt. Gox exchange.See a recap of the hearing.
Meanwhile, Benjamin Lawsky, New York state’s superintendent of financial services, questioned if the incident shows the “shaking out” of a fledgling industry that’s not regulated in any significant way.
“It may be a significant bump in the road for the development of bitcoin and virtual currencies, but I don’t think it means they’re going away or it’s any kind of death knell,”he told CNBC.
Carper said his committee has been calling for months on law enforcement and the industry as well as regulators to “provide clear rules of the roads” for parties involved with virtual currencies.
“Without these rules, businesses can’t be successful and consumers can’t be protected. If today’s news is true, it is a sad violation of consumer trust, whether through malicious action or simple incompetence. Regardless, it’s unacceptable,” he said.
At least one state securities regulator is warning about dealing with exchanges that handle trading in bitcoin. Late Monday, the head of the Alabama Securities Commission issued an “early warning” about the use and high financial risks surrounding the virtual currency.
THE FULL TEXT OF THE ARTICLE CAN BE FOUND HERE-http://blogs.marketwatch.com/capitolreport/2014/02/25/senator-says-mt-gox-bitcoin-exchange-failure-unacceptable/