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Closer regulation of Bitcoin is needed, federal agencies say

Bitcoin price falling

Bitcoin is in a bad place right now. The crypto-currency has fallen from a high of nearly $20,000 in December to around $6,500 today, making its market cap nearly a third of what it was just two months ago. To fuel the panic, US regulators will reportedly tell Congress tomorrow that digital currencies require “increased oversight” and a “new federal regulatory framework,” Reuters reports.

Christopher Giancarlo, chairman of the Commodity Futures Trading Commission, and Jay Clayton, chairman of the Securities and Exchange Commission, are scheduled to appear before the Senate Banking Commission Tuesday, and will reportedly push for a more “rational” regulatory framework to manage cryptocurrencies, the report says.

Giancarlo and Clayton will reportedly use the testimony to highlight the fact that agencies have been actively regulating frauds in the cryptocurrency marketplace in recent months — such as freezing assets behind a massive ICO the regulators deemed a fraud — but also demonstrate that regulators need a new framework to be effective. Currently, the SEC and CFTC struggle to oversee cryptocurrency exchanges, which handle billions in trades daily and oversee hundreds of thousands of accounts.

Cryptocurrency trading has become more widespread in the past few months, as Bitcoin has soared to new heights and alternative cryptocurrencies have gained popularity. Trading app RobinHood recently introducted an option for users to trade cryptocurrencies within the app, which opens up speculative trading to far more casual users.