In prepared speeches uploaded to the US Senate website for the 'Virtual Currencies: The Oversight Role of the U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission' hearing, the chairman will express his support for the cryptocurrency.

He will note that "regardless of the promise of this technology", users deserve the full protection of the federal securities laws. The enthusiasm that drives the current Bitcoin market leaves vulnerable investors open to "Fraudsters and other bad actors."

He is also expected to testify to the following at the hearing:

It appears that many of the U.S.-based cryptocurrency trading platforms have elected to be regulated as money-transmission services. Traditionally, from an oversight perspective, these predominantly state-regulated payment services have not been subject to direct oversight by the SEC or the CFTC. Traditionally, from a function perspective, these money transfer services have not quoted prices or offered other services akin to securities, commodities and currency exchanges. In short, the currently applicable regulatory framework for cryptocurrency trading was not designed with trading of the type we are witnessing in mind. As Chairman Giancarlo and I stated recently, we are open to exploring with Congress, as well as with our federal and state colleagues, whether increased federal regulation of cryptocurrency trading platforms is necessary or appropriate. We also are supportive of regulatory and policy efforts to bring clarity and fairness to this space.

The cryptocurrency market has seen its fair share of ups and downs over the past month, with a plunge in Bitcoin valuation taking it to its lowest level in months. Meanwhile, with the rise in interest in Bitcoin and other cryptocurrencies, Facebook has banned all ads until it can differentiate good actors from bad (and yet some still slip through.) The idea of federal regulation offers a promise of sanity in a market characterised by instability thus far.

Last December, Clayton delivered a similarly cautious message on Bitcoin.

"The technology on which cryptocurrencies and ICOs are based may prove to be disruptive, transformative and efficiency enhancing." He said then, "I am confident that developments in fintech will help facilitate capital formation and provide promising investment opportunities for institutional and Main Street investors alike."

Via US Senate Committee