00:00Thank you very much Eric. My name is Jerry Brito. I'm the executive director of Quinn center which is a Public Policy Research and Advocacy Center that's focused on public policy issues surrounding crypto currencies. And we have a great panel with us today. We've got two folks who are presently in government making some policy around crypto currencies and to folks who used to be in government and so we'll start the folks who are presently in government we have Jennifer Chatzky Calvary who is director of the Financial Crimes Enforcement Network and Commissioner Mark regent who is at the Commodity Futures Trading Commission and these are two persons in government who have shown a lot of leadership around cryptocurrency learning about technology and developing rules to bring clarity to the space . And we also have with us Arthur Levitt who's a former chairman of the Securities Exchange Commission and James Newsome who is a former chairman of the CFTC and both of them are presently advising Bitcoin companies. So I thought we'd do something a little different and maybe begin with the polling question which is a little provocative and get a sense of where folks are in a room as we begin to think about regulatory space next five years were the most developed nation governments most likely to do about Michael Barr virtual currencies really . Um just wait for it. Give me one second sorry guys . All right. Well while we're getting that why don't we when we get started anyhow so maybe we can start by asking the folks who are out of government and now advising Bitcoin companies. You know you're advising these companies what are the major regulatory challenges that these companies are facing. So when we start maybe with Mr. Levin I think that the lack of public knowledge of what the companies are and reputational issues . It's one of those industries that got the greatest publicity in terms of a negative event. And you combine that with the fact that I don't think more than a very infinitesimal percentage of people in financial services could define for you what a bitcoin is or what it does. So if you have lack of understanding and you have reputational issues Mt. Gox any of those scandals you've got a real problem. And the problem the challenge for the industry is to do a better job of defining what the industry does. Defining where we will be 10 years from now which is hard for the average citizen to contemplate. But it's that definition which will turn around public opinion. I think even the nomenklatura is against you a bitcoin sounds diminutive crypto currency sounds mysterious . I think that there is a big job to be done in terms of imagery in terms of making this mainline I think a lot of people in the industry think that mainline is something bad it isn't mainline is essentially where it's going to be ad if it's a viable industry. So I think there are obvious ways you can do it. And I think one way is to recognize that regulation isn't in and of itself an evil word. Regulation can be and usually is a stamp of acceptance a stamp of approval a stamp of having a right now I share I've been the object of punitive regulation for most of my working life. I haven't always worn the mantle of a regulator I've been in the regulated so I know what that means. But to be totally anti regulation is not a stamp that you want to embrace as well. I think sensible and balanced regulation is a stamp of approval for this and any other industry involving currency of any kind shape form or name Newsome. Yes I would tend to agree with what Chairman Levitt just said. I think it's probably easy for most in this room to overestimate the government knowledge level of bitcoin or virtual currency . I've been in a lot of the meetings with multiple agencies and the level of understanding is low. And I think the the quicker you recognize that and the quicker you start the discussions on a level with the regulators that they can understand. I think that is to your benefit. I think when you talk to most in Washington they can do a better job of telling you what Bitcoin is not versus what bitcoin is. Now that doesn't necessarily stop the regulatory process for years and years and years and the futures industry a futures contract was not defined and it really became defined more about the case law of what a futures contract was not versus what it is particularly as defined by Congress. I think Chairman Levin's comments are exactly right that good regulation I think could be very helpful to the virtual currency industry. I think having regulated transparent contracts which the public understands the public and support would be extremely beneficial to the growth and acceptance of a virtual currency as a mainstream currency. It's maybe a question for the regulators . You know something that was brought up in the last panel is that one of the main benefits of Bitcoin is that it is an open it's an open protocol and anybody can build on top of it. Now regulators tend to regulate closed loop systems. And so that's what they're used to. How do you approach regulating this . This network where the fact that it's open and anybody can come is this one of the central pieces. Maybe we'll start with miscount. Sure. So our regulation in many ways is about transparency. So Vincent at the U.S. Department of the Treasury focuses on regulate regulation from the standpoint of preventing money laundering and the financing of terrorism. And so we're in the business of tracing the money and to trace money and understand who is sending money or value to another. We need to have transparency in the system and no identities of individuals . So on the one hand having an open system can be very helpful . However the fact that it's pseudo anonymous and we can't necessarily get to the true identity is also a challenge. And so thus far we have not treated virtual currency any different than we've treated regular currency or any part of the industry that we regulate one part of regulating any industry is to make sure that you have an even playing field across all the different products and services and members of the industry . And so our approach has been to treat virtual currency as a money services business like any other traditional money services business whether that be a money transmitter or like a Western Union or a currency exchange that it plays by the same rules and is required to follow the same regulations. The challenge for us going forward and I just mentioning to one of the previous panelists it seems like both an opportunity and a challenge is that bitcoin is so different. The Ledger is so different the technology is so different and it provides some real opportunities to rethink what information should we collect . That might be important to tracing the illicit proceeds of criminals and combating terrorists finance. The challenge is is that we have the existing regulatory regime. And so while we imagine a future one we still need to abide by the current one . And it's that bridge from where we are now to where we should be in the future. That seems to me to be the biggest challenge . Christian Xi Jinping Yeah. I would echo some of those remarks because it's Bitcoin doesn't mean that we've really had to make all that many adjustments by way of policy adjustments per say but looking at our rules set and understanding how Bitcoin fits into it as has required some some new and novel type of thinking that I would say that the area that's probably most unique for us is if you have what we have there are two issues one. One set of issues relates to the underlying currency or the spot or cash market for a commodity. That's one thing. And the other part of our jurisdiction is regulated exchanges that list regulated contracts for trading on the second set of issues . The more regulated ecosystem in the derivatives space Bitcoin creates a number of new interesting challenges for us and I would say probably the single biggest issue there is along the lines of surveillance because every exchange that was contracts has a whole host of surveillance obligations. They have to abide by when regulated in their own marketplace. And so you have to understand the technology of bitcoin to understand how an exchange or swap execution facility in CFTC parlance you have to understand the technology understand how those kinds of exchanges or platforms are going to be able to abide by their regulatory obligations. So it hasn't really up until now anyway required us to rethink the policies themselves. It's just more more of an issue around interpretation and in understanding some sort of following up on that you know with the recent libel or an effects rate the sort of scandals. Is there any evidence or worry at the CFTC that the smoke spot market for bitcoin might be being manipulated or it could be manipulated. And do you have your authority to intervene there. Well I believe we do have the authority. It has not been tested has as you and I'm sure the audience knows. But I do believe we have the authority and I believe we have the authority because of Bitcoin. But I think a very rational reading of our statute qualifies as a commodity under the definition for a commodity Nikkei exchange act. So that gives us the authority to bring an enforcement matter for any type of manipulative activity so long as commodities moving in interstate commerce. And as you can imagine that parents are giving us a pretty pretty broad reach . I was talking to one of my colleagues on the train right up and basically I'm not sure whether the chairman agreed this analogy might have been a lot of interesting dialogue between us. As you see in the CFTC over the years but but under our statute unless unless you're an onion or a movie box office scene now there's a chance you might be considered a commodity under a statute. So again I don't I don't intend to make it sound as I don't to have a chilling effect. And it's just the reality of how the statute reads and how it's been interpreted by courts over the years. So it just it's it's hard to do. So we're not we don't have a special focus at the CFTC right now at bitcoin . Now we're looking at all asset classes all the time and we respond to tips and and any kind of indication of wrongdoing in any particular marketplace whether it's oil whether it's metals whether it's interest rates whether it's indices for effects as we saw last week. So there's nothing special about bitcoin in that regard. If we hear of things and information is brought to us that indicates there's manipulation going on we would respond to that. But but at the moment I don't have the impression that the staff and certainly at the commission level at the moment at the moment Bitcoin is not being singled out in a particular way. So Miss Calvary said that you know the regulations you have today and in the statutes that you're applying you know we'll get you as far as we've gotten and maybe a little bit further. But at some point the technology maybe doesn't fit the boxes that the statutes have in mind and everybody needs to get on the same page to move the ball forward. So Mr. Love How is it that the industry can do that can work with the regulators to find that common ground and get there. I think that there's not going to be a tug of war between the S.E.C. and the CFTC for jurisdiction over bitcoin. It's it's not of sufficient importance at this point in time to to warrant that kind of traditional tug of war. But there are people at both agencies that are studying the issue and I would encourage the industry to reach out proactively to both the CFTC and the S.E.C. and tell them what they're doing. There are a variety of companies and goals. There are companies that interface with the public and companies which we've heard from this morning that interface with commercial counter parties there are companies that are wallet companies. And I think that both the CFTC and the S.E.C. would welcome meetings and definitions of exactly how those companies make up the fabric of a new financial system. My conversations the few conversations I've had with regulators on a national level reveals a real willingness a desire to learn and to understand on the state level. I sense a greater political attention to the issues than on the national level. Now I'm not suggesting that the industry neglect the state level. I think they can't afford to. Whenever you have a product that interfaces the public in any form you've got regulators falling all over themselves for jurisdiction and rather than getting involved in terms of trying to pick the best regulator that you think represents your industry. I would see to it that you educate any regulator whether he be sure she'd be on a state or national level in terms of how your company or how you are into the business may be unique and why it is a plus. For the financial system how it provides oil for this system rather than sand and I think the arguments we've heard this morning are very compelling about the utility of the industry. But I think they go pretty far beyond the level of understanding of all but a few regulators both the CFTC S.E.C. and certainly the state level which and I think if you look at the CFTC they're in a very unique position with regard to the regulation of virtual currencies because I think a determination of who regulates the underlying Bitcoin or whatever virtual currency it is. And then regulating derivatives on that are two very separate things. So there really has to be no determination made about what bitcoin is and who is the underlying regulator for the CFTC to regulate derivatives based upon Bitcoin or other virtual currency. And you see that process taking place right now with Ledger AGs who has an application and to the CFTC to trade physically delivered options on Bitcoin. So a determination of who who regulates underlying Bitcoin is immaterial to Ledger X his application to become a derivatives exchange to trade derivatives on Bitcoin . So you know up here we have former and present federal regulators but of course so much is happening at the state level as Mr. Levitt pointed out. So you know as we know the New York license proposal is from his Calvary contains you know anti money laundering provisions that go beyond what Vinson requires for money transmitters. What are your thoughts on these requirements . Well first of all the bit license is seeking to do something much broader than what fins and regulates the state in New York is a prudential regulator. It regulates for consumer fraud it regulates for money laundering and terrorist finance and so the bit license seeks to do a lot of different things in terms of you know where it is right now on the anti money laundering provisions. I'm heartened by the fact that we have a state like New York and other states who are considering licensing and trying to think through some of these issues. It seems as though the process is one that's been open and iterative to the public in terms of seeking comment and seeking different rounds of comments and we'll see where it ends up in the future. But from Vinson's perspective our relationship and partnership with the states is incredibly important. We're a very small agency and we build off of the backbone of fat and the Fed and other federal regulators as well as state regulators and we work in partnership. So from our perspective having sensible but strong regulation at the state level that's going to do the job to fight money laundering and terrorist finance is very important . So I I think any of us who have been in the business world have suffered from the pain of overregulation or irrational regulation and that colors the thinking of a lot of people who are younger and newer at this business they tend to say no regulation this is crypto currency and it really deserves no regulation. I think you do a disservice to the growth of the industry by being blind to the realities of the world we live in . And in today's world having a compliance officer is a mark of professionalism and I think the crypto currency industry views a compliance officer as a cousin of the devil himself. And I think that's wrong because we're at a steep learning curve and there's no better way to adjust irrational misunderstanding regulation than by having the kind of transparency that I don't care whether you call him the chief compliance officer or a banana. But the function is to bring transparency and I think that's an important function. So here's a question from the audience I think is challenging what you're saying Mr. Leavitt. This is from Jim Harper from the Bitcoin Foundation he says advertising has had a relatively stable read poor reputation over periods of both intensive and relatively lax federal trade commission regulation. Is there evidence from other fields that regulation improves reputation. I couldn't hear the last part of that. Is there evidence from other fields that regulation improves the reputation I don't know how you can codify that except in terms of your own experience and having gone through the dialogue of hiring literally thousands of people or structuring hundreds of boards of serving on 24 public boards of 24 publicly owned companies . I think my experience would tell me that the question ask so many times before these relationships are formalized is how good is your company. What are the qualifications for their leadership. Do you conform to regulatory standards . What's the level of transparency it is a terribly important factor in terms of image and reputation . And is it the only factor. Certainly no. But I think it's a dreadful mistake to base your business plan on opposing regulation. I don't see that on a risk reward basis that makes much sense at all. You may not have the same kind of layers of reputation and teams of lawyers that Goldman Sachs or JP Morgan might have. But you'd have the same kind of regulation that any publicly owned or even privately owned company that someday may seek to tap public or private funds. It's a plus. It's not a negative and I think everything you do in the early stages of building a business is to try to diminish the negatives and and and amplify the pluses. I think that having disclosure transparency which is really the goal of sound regulation should be. I think that's a net plus use me when it suits him. Yeah I would answer that in three ways. Hunt Brothers and silver and Ron and natural gas and opaque and crude oil prices. I think that goes to the heart of regulation helping the overall industry. I would just add to it the chairman mentioned this but I think regulation connotes that a certain level of standards are being met and I would be shocked if the data didn't show that a majority of Americans use regulation at some respect anyway as a proxy for minimum standards. And without that I would guess I'm sure the damn approve this out that most Americans wouldn't have the confidence to either use that service or buy they do it without it. I think that just has to be a fact of life. So here's how I say that again without seeing specific. Sure. But ask that I'll be shocked if that's not the case. That doesn't mean that there are failures on the regulatory front. Occasionally that that happens and standards aren't always met even among regulated entities. But but I think it's a pretty safe assumption to make. So here's another question from the audience and we'll go down the line and do Andrew proxy from Bloomberg asks Have any of you purchased a good or service using bitcoin let me start with you Mr. Commissioner region. Have you purchased any good or service using bitcoin. Look I am such a lowly civil servant. I can't afford a smartphone to be able to use it easily. We'll talk after this for a little bit. I tried to lose them. No we actually tried to get one of the companies we advise the pay is in bitcoin but there's no discover. I have not personally but we we certainly do some purchases at vendor . Okay. Well coin center invites you all to a workshop and we will get you each wallet and we'll do something fun. So it's it's not a secret that legitimate Bitcoin companies are having trouble establishing bank accounts. What can we do to get banks more comfortable so Michael Barr when we saw everything. I think that goes to the two questions ago about the whole idea of your reputation. If you're regulated Do you have a better reputation or what evidence is there that if you're regulated you have a better reputation. One of the things that I've been hearing from banks is we've been working through this issue quite diligently with them is their concerns about the industry and whether it's regulated enough and how they can control for their own risks when they're not sure that one they understand the technology as chairman Levitt suggested. And to that they understand that there's controls in place amongst Bitcoin companies exchanges they don't want to assume a risk that they don't understand and they're not sure is being well controlled . But how can we be more specific. Is there are there particular things that companies can do too. I mean how is that risk being judged on the part of the company because ultimately the banks are going to be looking to their regulators and what are the regulators what are the answers you're giving them when you're asking these questions about how they manage that risk or how they judge up risk. So there's no specific you know do A B C and D and your good type of answer because every business so a bank when they decide who they're going to take on as a customer has to look at their own risk appetite their own controls that they have and whether they think that they can control for the risk given their resources given their their technology given their understanding of the client and make a decision based on those factors. So but what we tell them is that you do need to apply a risk based approach and focus on the threat of actual illicit finance not on the threat that of regulatory risk not under the threat that you're just concerned about an entire industry but haven't actually looked at it or assessed that the potential for illicit finance. And if a bank or other financial institution takes that risk based approach then they're doing what we expect them to do. What the international standards expect them to do. I've noticed Vincent in other parts of Treasury issue new guidance statements encouraging banks not to be so severe with 30 riskiness as it pertains to money service businesses of different kinds. Is that something that you might see more of in the future. Well we just issued one last Friday so yeah it's kind of soon to to do a second statement. But what we what we were hoping to accomplish there with this statement was to set the tone both for our delegated examiners as well as industry on you know what exactly the Bank Secrecy Act our anti money laundering countering the financing of terrorism laws require and that is this risk based approach a focus on actual illicit finance and the risk of illicit finance not the risk of regulatory risk and just broad pronouncements to close off certain types of businesses. All of this is related to by that I mean there are people at all the major banks studying this issue. There are people who are very strong proponents of the issue. There are others at the banks who feel that the bitcoin industry is competitive but I don't think that's the major factor. It's misunderstood. The volatility works against it . It was not dissimilar from the accounting firms about a year and a half ago two years ago it was very difficult to get an accounting firm to do an audit of a major company. Today it's much easier. I think that through the industry trade groups there's a leadership of the industry calling on the banks not necessarily the CEO but the people who really are dealing with bitcoins and crypto currency and understand them and repeating those visits. You're going to break through in a significant bank and then the rest of them will follow . They're a very important part of the fabric of building this industry and I think it should be a top priority for every firm to do what they can. The regional firms should devote their time to major regional banks. It's likely that a regional bank will come on board before the JP Morgan's of the city banks too . And I would put major emphasis on those regional banks particularly firms that are located in the Miami is the Atlanta as the San Francisco is of the United States. So quickly yeah there's given the time period we've been through in recent years in a mature way all the way through it but in response to the crisis and the legislative response the regulatory response the enforcement response which is still ongoing. Know certainly it's led to I think a heightened sense of risk aversion as it relates to safe keeping or stewarding your reputation or even more. Basically as it relates to compliance and legal risk so there'd have to be a really attractive cost benefit analysis I would think. If you're within the management of these banks before you decided to embrace the technology in a way where you're feeling comfortable enough to partner with with some type of Bitcoin company. I get the sense of that. And based on my interactions with the sector quite a bit there's a real movement towards simplifying and reducing compliance and legal risk and you know to sort of help with open eyes embrace something that's not tested not fully implemented it makes it difficult for the testing to ever happen. I'd mobilize your VCR as well. I mean the bases are a very large source of business particularly for regional banks and they should be standing side by side with companies in calling on the banks and breaking through once once you get some of the regionals the others will follow. So we want to talk a little bit about what the CFTC is doing and the need for these derivative products so Mr. Newsome you know you're on the board of Ledger x. So what is it Dow Jones is trying to build an options exchange. So what is the need for these products and how are you going about seeking that approval . Well Jerry Lederer X is quite far down the pipeline with regard to their application. One of the initial issues is the issue that Commissioner Wiegand brought up and that's the commission staff developing a comfort that the underlying bitcoin market itself is not easily manipulated. And I think the commission staff is beyond that question now and they're looking specifically at the contracts which will be pretty plain vanilla options contracts. Now I think they'll be used in two ways because they will be physically delivered contracts one because they're physically delivered the buyers and sellers of those contracts will be able to buy and sell bitcoin through the contract and then secondly for the commercial users that have exposure to price volatility and Bitcoin you'll be able to use those contracts then to hedge that price exposure. And I think those are the two primary components of how those contracts will be utilized. Commission which are you seeing more applications more folks coming to the commission looking for approval. Well it comes to us as commissioners and a couple of different ways of first and most obvious way is when the staff recommends to the commission some kind of commission action and approval I guess in this case and it could be approval of a a an exchange or platform focusing on bitcoin derivatives or it could be approving a contract. And we've really had only one opportunity to do that so far. I'm aware as has as Jim just alluded to that there are conversations taking place at a staff level between industry participants and the CFTC staff but that's usually how the process works. You know the people that need regulatory approval start with the staff and work that way and then eventually it comes to a head with with the commissioners. So I'm not especially aware of anything other than a ledger ledger ex. To be honest I'm generally where there's a lot of churn a lot of discussions taking place but I don't I don't know much by way of specifics. So Britain's Chancellor of the Exchequer George Osborne has been signalling that the UK wants to be the centre of virtual currency trade by creating an especially welcoming regulatory atmosphere in Japan as Senator Lee suggested it wants to pursue in light touch approach. How should a global regulatory reaction to Bitcoin affect what the U.S. does and to what extent is global cooperation necessary and possible. We'll start with this color. So global cooperation on anti money laundering and countering the financing of terrorism is essential. We all know money moves globally. And both criminals and terrorist financiers are seeking to move money globally through that these transparent means possible . So there is an international standard setting body the Financial Action Task Force that sets forth what different countries should have in terms of the basic regulatory regime with respect to money laundering and terrorist finance and virtual currency has been a topic as of late and something that everyone is looking at and thinking about the standards. So when I hear the U.K. or Japan say that they want to have a welcome a welcoming business atmosphere for four crypto currencies. That to me does not necessarily signify that they're not also going to have appropriate anti money laundering controls in place and I think the same is true here in the United States. I think the challenge is to figure out a way to have both and that we can certainly do so and that will only improve the reputation of the industry and allow it to grow and prosper. Commissioner Regent how much you pay attention to what's happening nationally. Well I do pay attention. In fact I I was I was traveling overseas last week. And the topic of bitcoin came up at every meeting I had with someone from the official sector. So that includes regulators overseas in Western Europe in this case . So it's clear something on their minds it hasn't risen to the level where it's understanding where at the moment hasn't risen to to a level where it's becoming an active discussion within some of the international coordinating bodies at the CFTC is involved and I ask I would be probably the best example of a group that the CFTC works with that has has a coordinating role and set standards and principles for the regulatory community around the globe to try to follow. So hasn't really been been an active topic of discussion in that body. I think it's probably being discussed at the at the country level by those remember it. But but at the moment it might be a little premature to call for any kind of particular coordination but I would just end by saying though that you know the drought US markets historically have always been very very global in nature and these bodies are pretty relevant to the work of the CFTC and in some cases or some issues perhaps more so than others but we're going through this very important debate right now concerning standards for clearinghouses and at the heart of that is whether or not the principles established by one by I ask on this case are being abided by with you with respect to each individual jurisdiction around the globe. So once it comes to that level and becomes part of Bitcoin becomes part of the discussion at that level it will be very very relevant. So you've got a few minute minutes left when we open it up to questions from the audience if anybody has a question raise your hand here while we're waiting for a question too. Let me just add that in terms of the business climate here in the U.S. we have now seen nearly a hundred virtual currency businesses register with Vincent and we're receiving several suspicious activity reports and reporting on a regular basis. It's quite well done. The reporting that has come in law enforcement finds it quite useful so I think we we do have a growing industry here in the U.S.. You know you mentioned you mentioned before how the bitcoin block chain is open and that can be useful to law enforcement. And Vincent if I understand correctly also developed intelligence to what extent have you been looking at the blotch in developing tools to analyze and make your work more useful. Well without going into specifics of exactly what we do offense in. I do care. And so one of our previous panelists said Is there anyone here who thinks about national security every single day. And I didn't raise my hand but I probably should have. So we care about how ISIL is financing itself the Islamic State if you'd rather go with the press storm . We care about recovering assets stolen by the former Ukrainian regime we care about how the Mexican drug cartels are moving money through the United States and back into Mexico. So you know we are following different patterns and flows of of money every single day including things involving virtual currencies crypto currencies digital currencies Bitcoin and the whole like . And so we do follow the technology we do work with and train our law enforcement counterparts on how they might be able to to follow money by looking at the ledger. And then we watch with concern and as we see new technologies develop to make it more difficult to trace the flow of recent proceeds. I would just add that I'm trying to understand bitcoin more Moore has had one interesting result for me within the CFTC and and just looking at the current rules that we have in place. I'm going to have a meeting later this week where I'm bringing in all the division directors and the topic of the conversation is going to be what are all the rules we have in place under CFTC regs that apply to intermediaries exchanges clearinghouses or even swap dealers I suppose where there's some kind of an obligation that entails the processing of a payment. Our industry is one where collateral is being moved around all the time between customers and Sams which are you know clearing members basically members of clearinghouses and then between clearing members and clearing houses. So money and collateral is moving money and securities like they're moving all the time throughout the course of a day in our industry. And we have rules that govern that process. So one very specific thing came up. This is a issue Jim knows a great deal about. We have a requirement of clearing members and how quickly they've got to put their own money into the account of a customer. If the customer account is short and there's specific timelines that have to be met under our rules and we ran into some problems where there are questions around feasibility about how fast you can send money in how fast a customer could send money into a clear member. I'm not suggesting that Bitcoin is a solution for that tomorrow. But but the point is is at having this greater understanding about innovation generally in the payment processing space and how that encourages policymakers to think about even if it's not a particular technology but how can there be improvements more generally from any kind of innovation as it relates to transferring securities and money and our regulated environment is a very very healthy thing. I think to be discussing and again just my entree into the Bitcoin world through these exchange these contracts being filed has led to that. Now maybe there's other work going on inside the CFTC as well that I'm not aware of but I for one thought would be useful just to just to see again how how we can maybe look again at our rules set and figure out how innovations in this space can reduce risk but also perhaps make compliance more efficient. So I think we have time for one question if anybody wants to volunteer yes we're here because well let's let's make sure it's a question though. Okay sure. How you keep it short because you're giving them one city of currencies in the world over 550 different digital currencies . Right. So they all have sometimes technological functions like Bitcoin as a real yet they're born in a decentralized atmosphere the first time in the nature of humanity is there this currency and it's completely decentralized. What's what's the question. Let's get to the real one minute. Fine. How do you make the differentiation and what do you intend to do about a crowd of developers that is going to push back on every front with bitcoin may die another may pop up. How do you how do you look at that from a decentralized standpoint because it's like herding cats. Bitcoins decentralized. How do you regulate it . I think from I think from a derivatives standpoint it doesn't matter because marketing that's already made the comment that that most of the contracts that are traders futures or options are global to begin with. So I don't think that creates any real problems from a derivative standpoint. You know it may create more issues for regulators who are underlying who are regulating the underlying Bitcoin itself from a derivatives standpoint. I think that's actually pretty normal. So final question is we're out of time in one or two words. The question from the beginning of the panel which was where do you see Bitcoin visa be regulation in five years. Let's go down line. This region evolved compared to where it is now any way to predict otherwise . I think we'll be absolutely a very important part of the financial markets and there'll be a panel up here at that point talking about some other what is today arcane product. But by then I think bitcoins will be very much part of the our financial system accepted and regulated I think we're at a very critical stage right now and I think education is a big component of that. I think from a market standpoint obviously the technology is surrounded Bitcoin and other currencies to make successful it already is . I think from a derivatives trading standpoint we're far down the road to creating ledger eggs or other exchanges that will trade derivatives of a virtual currency. But I think today there are probably other groups but I know there's one the chamber for virtual currency in D.C. whose sole purpose is is trying to educate policymakers regulators about virtual currency and how it can be utilized and how it can serve the marketplace . And I think those kind of roles are certainly critically important as we sit here today. Michael McKee accepted and regulated. I concur with Chairman Levitt. So help me thank the panel for being here .

Calvery, Wetjen, Levitt, Newsome on Bitcoin Regulation

Nov. 17 (Bloomberg) -- Jennifer Shasky Calvery, director of the U.S. Treasury Department's Financial Crimes Enforcement Network, U.S. Commodity Futures Trading Commission Commissioner Mark P. Wetjen, former U.S. Securities and Exchange Commission Commissioner Arthur Levitt, and James Newsome, a founding partner of Delta Strategy Group, participate in a panel discussion about the outlook for regulation of Bitcoin. Coin Center Executive Director Jerry Brito moderates the panel at Bloomberg's "Bitcoin: Beyond the Currency" event in New York. Levitt is a board member of Bloomberg LP, the parent of Bloomberg News. (Source: Bloomberg)