Bitcoin Backers to SEC: Exempt Us from Oversight
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What is the episode overview and why does Bitcoin regulation matter?
Your Money Briefing. Money and market stories from The Wall Street Journal. I'm Charlie Turner in New York. The cryptocurrency industry is lobbying against tighter regulations that they say would be unfair to their business. We'll explore this in a moment. First, here are some money headlines. The Wall Street Journal's Money Beat team says the threat of a more restrictive U.S. trade policy is already having an impact on the U.S. economy. It's a development that stands to keep investors on edge after a period of stock market volatility. President Donald Trump's announced tariffs on steel and aluminum, as well as his threat of further tariffs aimed at China, are driving up the cost of steel, according to the Federal Reserve's Beige Book survey of the central bank's 12 districts released this week.
From one Beige Book anecdote, a firm in the Boston district reported that thin-gauge foil is produced only in China, and tariffs raised the price threefold. The contact argued that, quote, these tariffs are now killing high-paying American manufacturing jobs and businesses. Investors are predominantly worried that a trade war could drive up prices of goods or weigh on consumer confidence, both of which could hit companies and their share prices. Some news from the journals heard on the street team is enough to make investors toss and turn at night. Shares of Sleep Number plunged Thursday after the company posted disappointing quarterly results. Sales fell 1 percent compared with 12 percent growth in the year earlier period.
How are trade and economic headlines setting the context for crypto debate?
Gross margins fell 2 and earnings per share declined by 7 percent. Sleep Number makes those widely advertised beds they can adjust firmness according to the preferences of users. It blamed poor results on its transition to a newer, more advanced series of beds that can diagnose sleeping patterns. While that sort of data may or may not attract buyers, the company's own numbers are disquieting. With earnings over the past 12 months of just $61 million, Sleep Number still has a market value of $1.2 billion, down from $1.8 billion this time last year, according to FactSet. Coming up, Bitcoin backers are telling regulators back off. This is your Money Briefing from The Wall Street Journal. Welcome back.
How closely should Bitcoin be regulated? The Wall Street Journal says cryptocurrency firms and their venture capital investors have lobbied regulators, saying the cryptocurrency industry should be exempt from federal oversight. They argue that oversight from the Securities and Exchange Commission would slow digital coin growth. Let's get more on this from Wall Street Journal reporter Gabriel Rubin, who joins us from Washington. Gabriel, on the subject of lobbying, you write that there was a meeting late last month between Silicon Valley backers of digital currencies and the SEC. Now, what were some of the firms and what was their basic argument?
That's right. So on March 28th, partners from Andreessen Horowitz and Union Square Ventures, both of which are Silicon Valley and New York based venture capital firms, met with the SEC to discuss token offerings and whether those should fall under existing securities laws. And basically the argument from these venture capitalists, as well as some other cryptocurrency lawyers and lobbyists, was that token offerings are unique and they should fall under a sort of safe harbor designation that would exempt them from a lot of existing securities laws, which would really allow the crypto space a lot of room to grow without regulatory oversight, which is something that regulators don't seem to be too receptive to.
What is the Securities and Exchange Commission's argument?
So their argument, like other regulators in Washington, is that cryptocurrencies might be a novel asset class, but nothing is new under the sun. And a lot of these things, if it walks like a duck, quacks like a duck, then it's probably a duck or in this case, a security or a commodity. So the Securities and Exchange Commission essentially looks at token offerings and
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