UPDATE 2-U.S. regulators may ask Congress for virtual currency legislation

* Regulators say they need more resources

* Hearing follows sharp drop in bitcoin price this year (Includes additional details and context)

WASHINGTON, Feb 6 (Reuters) - U.S. regulators may ask Congress to pass legislation to improve oversight of virtual currencies like bitcoin amid concerns about the risks posed by the emerging asset class, the head of the Securities and Exchange Commission said on Tuesday.

The comments by SEC Chairman Jay Clayton before the Senate Banking Committee are the strongest indication yet that federal authorities are mulling new laws to scrutinize virtual currency trading and investing.

Clayton, who testified alongside Christopher Giancarlo, chairman of the Commodity Futures Trading Commission (CFTC), said the agencies were coordinating with the Treasury Department and the Federal Reserve on the matter, but he added that lawmakers may have to clarify and enhance regulatory powers.

"We may be back with our friends from Treasury and the Fed to ask for additional legislation," Clayton said when asked whether Congress needed to act on virtual currencies.

The hearing followed a rout in the price of bitcoin, which has lost about half its value since the start of the year on concerns ranging from a global regulatory clampdown to a ban by some banks on using credit cards to buy bitcoin.

Senator Mike Crapo, the Republican chairman of the panel, and Democratic Senator Sherrod Brown were among the lawmakers to express worries about volatility, investor protections and the risks posed by cyber criminals in the virtual currency market.

"Between the enforcement actions brought by your agencies, the hack of the international Coincheck exchange, and the concerns raised by various regulators and market participants, there is no shortage of examples that increase investor concerns," Crapo said, referring to hackers' recent theft of $530 million from Japanese bitcoin exchange Coincheck.

Both Clayton and Giancarlo used the hearing to showcase the efforts their agencies have made to police the market and to highlight limitations in the current U.S. regulatory structure, whereby virtual currencies fall into a gray area between the SEC, CFTC, Treasury, the Fed and state regulators.

Federal legislation could help rationalize this patchwork and clarify which agency has the authority to police the underlying virtual currency cash market, the regulators said.

Clayton and Giancarlo also questioned how their respective agencies would fund increased scrutiny of the rapidly-growing virtual currency market, with Clayton saying he needed more people to staff the trading and markets division.

"Personnel is my biggest challenge at the moment," he added.

Committee members, however, did not appear to stake out a clear position on whether to pass virtual currency legislation. Crapo noted that the underlying distributed ledger technology offered "present significant positive potential" to increase investor access to financial markets.

On the Luxembourg-based Bitstamp exchange, bitcoin was 1.2 percent higher at $6,959.00 in afternoon trading in New York on Tuesday. U.S. stock markets were mixed in volatile trading after two days of heavy losses. (Reporting by Michelle Price, Pete Schroeder and Gertrude Chavez-Dreyfuss; Editing by Paul Simao)