The SEC is going after cryptocurrencies

Cryptocurrency is the latest trend and is gaining in popularity. While Bitcoin has taken a nose dive in recent months many other cryptos are stepping up in popularity. This has prompted action from not only the major credit card processors but also the US government.

In a move earlier this year credit card companies have changed the way purchases of cryptocurrencies are dealt with. Before they were treated as normal purchases, subject to standard interest rates but now they are being dealt with as cash advances and subject to much higher interest rates. Crypto traders have been up in arms, especially as some banks refuse to even process these transactions and they are questioning whether banks feel threatened by crypto.

With credit card companies trying to shut off cryptocurrencies most people turned to the US government to see what would come next. In February the Senate Banking Committee heard testimony on potential dangers of using crypto as an investment. The Commodity Futures Trading Committee was positive about it and the technological innovation it has brought with blockchain technology. The SEC chairman was more reserved but both agreed that it needs further study. That is no surprise with all of the scams sprouting up revolving around crypto’s use.

In March the SEC began sending out subpoenas by the dozen to try to figure out what to do about it. Not only that but they also issued a warning that Initial Coin Offerings could be in violation of SEC rules. The chairman does not believe that cryptocurrencies comply with securities laws and neither does the unregulated market and that is just waiting for government oversight.

At this point it seems that the SEC is just trying to figure out what exactly to make out of crypto and the “Wild West” that is operates in. It is no surprise that the government would poke its nose into this and with hundreds of millions of dollars being lost as part of criminal activity it was bound to happen.

It is highly unlikely that crypto will be banned. In fact this could be just what is needed to bring it into the mainstream. A majority of Americans will not invest in something like this unless there is a guarantee behind it or it is proven. While the government getting its hands onto something is not always a good thing, this could be the best thing to happen to crypto. Or it could not, some people like it just the way it is.

At the very least should crypto become mainstream it is likely that Visa and MasterCard will reverse their course and that it will become something accepted commonly by businesses. While the dollar or the credit card will not disappear anytime soon accepting crypto could become just as easy as using a credit card or something like Apple Pay.