U.S. Government Will Consider “Token Taxonomy Act”, Potentially Freeing Crypto from Securities Laws

[PRIBO247]

Kate Rooney, CNBC’s markets reporter, has revealed that two
congressmen are working on a bill to remove crypto from the
72-year-old U.S. securities law. The representatives, Warren
Davidson and Darren Soto, are calling it the “Token Taxonomy
Act” and will be presenting their ideas to the House within the
next few months.
Should the House pass the bill, cryptocurrencies and initial
coin offerings (ICOs) will no longer be under the Securities and
Exchange Commission (SEC) regulations.

History Repeats Itself
Comparing the state of crypto to that of the early internet,
Davidson stated that back then, Congress had to pass
regulations without over-doing it. The same must be done here
if we are to keep the crypto industry growing:
“In the early days of the internet, Congress
passed legislation that provided certainty and
resisted the temptation to over-regulate the
market. Our intent is to achieve a similar win
for America’s economy and for American
leadership in this innovative space.”

Of course, regulators are worried about consumer safety in the
cryptocurrency industry. 2018’s big blowup didn’t help with
things either, as many companies lost large investments of
Bitcoin and other cryptos in a short period of time.
Cryptocurrency enthusiasts often state their disgust at the
government using such an old framework to regulate a modern
asset. As of now, the SEC decides which cryptos are securities
based on the “Howey Test” from 1946. Essentially, if “a person
invests his money in a common enterprise and is led to expect
profits solely from the efforts of the promoter or a third party,”
then that investment is considered a security.

Fortunately for us, those in power are starting to realize that
cryptoassets are a little different from traditional ones.
Because of blockchain technology, there isn’t always an
interfering central authority. That, and platforms can expand
and improve over time. These investments aren’t necessarily
like a regular stock.
Kristin Smith, leader of The Blockchain Association, the first
group to lobby for blockchain technology at Washington,
agrees: “These decentralized networks don’t fit neatly within
the existing regulatory structure. This is a step forward in
finding the right way to regulate them.”
Suggested Reading : Learn about the best Monero wallets.

A Change of Heart
This news comes after SEC chairman Jay Clayton stated that
he would not update the Commission’s regulations for
cryptocurrencies. He believes that every ICO is a security
aside from Bitcoin and Ethereum, which should be registered
as commodities. The head of the Division of Corporation
Finance at SEC, William Hinman, echoed this, stating that ICOs
are securities because a central party is benefitting from
investments.

If approved, the Token Taxonomy Act would amend the
Securities Act of 1933 in addition to the Securities Exchange
Act of 1934, which established the current securities laws.
Only this time, the bill would add a new definition for “digital
tokens.”
However, it’s important to note that digital assets will still see
regulation, says Overstock.com blockchain lobbyist Kristin
Smith. She continues, stating that the job would fall to the
Federal Trade Commission or the CFTC should this bill pass.
Also, this bill would cause the IRS to alter virtual currency
taxation.

The Token Taxonomy Act is the result of a roundtable with over
50 representatives this past September. Davidson hosted it,
and members included Fidelity, Nasdaq, State Street,
Andreessen Horowitz, and the U.S. Chamber of Commerce.
Parties spoke on companies struggling with ICO taxation—
especially regarding utility tokens. They argued that if these
regulations aren’t “crystal clear,” then the industry in the U.S.
could not flourish and these companies would move overseas.
The bill will need to be reintroduced next year, however, the
presentation causes much to think about, says Smith.”It
shows that there’s momentum on both sides. There’s interest
among bipartisan members, and lays groundwork for the next
Congress.”

https://unhashed.com/cryptocurrency-news/