The major US regulators that oversee cryptocurrency include the SEC, FinCEN, the Federal Reserve, the CFTC, and the IRS. The SEC regulates crypto assets deemed securities and has rejected several applications. The CFTC regulates crypto derivatives and commodities and has approved some. The Federal Reserve has concerns about digital currency but is not actively pursuing it. FinCEN confirmed that anti-money laundering laws apply to virtual currencies. The IRS also confirmed that virtual currencies have tax implications. Overall, US regulators aim to regulate crypto assets in order to impact long-term economic growth.

1. Where US Regulators Stand on Cryptocurrency

2. Cryptography refers to acts and study of methods of securing communication
from access by third parties. It is a method of developing protocols that prevent
third parties and the public from reading certain messages. Various elements in
the security of information like data integrity, confidentiality and
authentication are key in cryptography. Cryptography is applied in various
fields to secure information and prevent harm, particularly in financial
transactions. Financial cryptography is the application of cryptography where
interception of the message can lead to financial losses. The use of
cryptography in financial transactions is a new advancement. Previously
cryptography was exclusively applied for diplomatic and military purposes.

3. How U.S. regulators regulate Cryptocurrency
In the U.S, there is a huge oversight of financial cryptography by the regulator.
The major regulators include SEC, Fincen, the Federal Reserve, the CFTC and
the IRS. The securities and exchange common (SEC) has the responsibility of
overseeing crypto assets that are considered to be security. Various agencies
have tried to get security approval for various securities but have been rejected.
The commodity futures commission (CFTC) has responsibility for crypto-asset
derivatives and commodities. Various crypto-assets derivatives and companies
have approved by the agency. However, the Federal Reserve has indicated that
it was not pursued actively digital currency. For the Federal Reserve, digital
currency raises significant inquiries that needed to be resolved carefully.

4. The U.S. Securities and Exchange Commission (SEC) has published fresh
regulatory guidance for token issuers, nearly half a year in the making
(Bitcoin). The guidance focuses on tokens and outlines how and when these
cryptocurrencies may fall under a securities classification according to the
document. The guidance includes examples of both networks and tokens that
fall under securities laws, as well as a project which does not.

5. The financial crimes enforcement network (FinCEN) indicate that AML laws
have an application to people obtaining, exchanging, creating, distributing,
transmitting, and accepting virtual currencies. It means that people who deal
with virtual currencies are subject to money service business reporting,
registration, and keeping records. The Internal revenue service has indicated
that the handling of virtual currencies has a tax impact that can lead to tax
liability. In general, the U.S regulator aims at regulation crypto assets.
Regulation of those assets will have a huge impact on the long-run growth of
the U.S economy.

6. Application of encrypted messages
The work of DR. Davide Chaum made the cryptography community think
about the application of encrypted messages in financial instruments. In the
initial stages of its development, it applied the guide of cryptography, and only
simple ideas were used. Methods of account money by SSL like e-gold and
PayPal were moderately successful, but more innovative methods like blind
token money were applied.

7. Financial cryptography is also applied in the creation of new types of money.
Various auction protocols and proof of work are applied in financial
cryptography. Hash cash is a proof of work system applied to prevent email
spam and denial of service attacks. It is also a kind of financial cryptography
that is applied to the limitation of spam. In recent time Hash cash have been
applied in Bitcoin and other types of cryptocurrencies. It has been observed
that financial cryptography has a huge application.

8. Reference
Where US Regulators Stand on Cryptocurrency. (2019, October 16). Retrieved from
Bitcoin: https://news.bitcoin.com/where-us-regulators-stand-on-crypto-assets/