The FTC just announced that it, too, will join the federal government’s growing crypto/blockchain regulation club, right alongside the ranks of the SEC, CFTC, and Congress.
Officially, this means the FTC has now created its own internal “Blockchain Working Group.” Though the FTC has been publishing information about cryptocurrencies since 2014 (see this hilariously-titled and well-written informative alert, Back, Back, Back It Up, for example) and brought its first cryptocurrency-related case as early as June 2015, the agency’s decision to form a working group shows a deeper level of commitment by the agency to engaging with players in the crypto space. And, certainly, it shows that blockchain and crypto assets are likely here to stay.
But does the creation of the FTC’s Blockchain Working Group mean *terrified gasp* . . . more regulation? Well, frankly, the amount of regulation doesn’t really matter in this context, so that isn’t even the right question to ask (the “right question to ask” appears at the end of this article). Preoccupation with the number of new laws aimed at regulating this previously unregulated space is futile. The crypto community enjoyed the absence of specific government oversight for years, but that didn’t stop state and federal agencies from bringing enforcement actions based on existing laws. Of course, the existing laws those agencies asked the courts to apply never contemplated the existence or consequences of this new, world-changing technology.
The FTC says its working group “has at least three goals”:
- “[B]uild on FTC staff expertise in cryptocurrency and blockchain technology through resource sharing and by hosting outside experts.”
- “[F]acilitate internal communication and external coordination on enforcement actions and other related projects”; and
- “[S]erve as an internal forum for brainstorming potential impacts on the FTC’s dual missions and how to address those impacts.”
So, given the FTC’s (purported) goals, the “right question to ask” about the creation of the agency’s Blockchain Working Group (and about every other government-sponsored blockchain/crypto working group) is whether the agency’s consequent actions will help or hinder American entrepreneurs and established businesses who are and have been using the technology to create new wealth in the U.S. Certainly the FTC’s most recent enforcement action that we blogged about here earlier this week is likely a positive regulatory step in that it removes a purported bad actor from the scene.
That the FTC has joined Congress, the SEC, and the CFTC in dedicating personnel and other resources to better understanding blockchain technology seems an inherently good thing. Here’s hoping that it is.