EXCLUSIVE -The chairs of Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), John Clayton and J. Christopher Giancarlo respectively testified before the Senate Banking Committee yesterday on their regulatory ideas and concerns on cryptocurrency. Surprisingly, the sentiment was not a negative one.

While both Clayton and Christopher remained “cautiously optimistic” about the prospects of technological innovation as well as wealth creation for the overall economy, they both acknowledged the risks stemming from gaps in regulation in the overall crypto-world.

Clayton categorized that ecosystem into three sections: technology (distributed ledger technology and blockchain); cryptocurrency, which he described as “replacement for dollars,” and ICOs, which he likened to stock offerings.

Clayton pointed to two major problems associated with ICOs and cryptocurrency: lack of sufficient oversight and illegal ICOs.

Both Clayton and Giancarlo seemed to agree that rather than expanding the jurisdiction of one entity, coordination among the various regulatory bodies in the country was required. Right now, each entity is functioning in a disparate manner, they implied.

For instance, when it comes to ICOs, the SEC’s Clayton said there was no need (at the moment) for expanding the SEC’s jurisdiction on the phenomenon. “Every ICO I’ve seen is a security,” Clayton said. “We have jurisdiction and our federal securities apply.”

Giancarlo, on the other hand, mentioned the CFTC’s ability to obtain and analyze trading data for fraud and manipulation on something like the newly launched bitcoin futures.

The details of how and when the various regulatory authorities will come together to form a comprehensive framework remains to be seen.

As Giancarlo said:

These markets are new, evolving and international. They require for us to be nimble and forward looking and coordinated with state, federal and international colleagues and engaged with important stake holders, including congress.

Following the hearing, the price of the best known virtual currency, bitcoin, rose 16.7% to $8,249 as of today at 11.00 AM ET, according to CoinDesk.

Watch the whole testimony here.

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