Congressman Reintroduces Token Taxonomy Act to Separate Crypto from Securities
A Token Taxonomy Act (TTA) that seeks to exclude digital tokens from U.S securities laws has been reintroduced by Representative Warren Davidson (R-Ohio).
TTA To Redefine Digital Assets
Davidson brought the bill before Congress on Monday. The TTA was first mentioned in a 2018 bill presented by the Congressman. He reintroduced the bill in 2019 with some downgrades but still could not acquire a majority vote.
This latest attempt will make it the third time Davidson has spoken about the need for regulatory clarity concerning the burgeoning crypto ecosystem.
Speaking on the need for the TTA, Davidson said the current laws and regulations create confusion and are hostile towards blockchain-oriented businesses. And this toxic regulatory environment was slowly making crypto-facing companies abandon the US market for countries with clearer and friendlier laws.
Supported by the Blockchain Association (BA), the TTA would create a workable regulatory structure, making it easier to agree on a digital asset's features that fall under the securities category. The bill would also exclude digital asset swaps in an individual retirement account from the current tax regulations.
The bill is also co-sponsored by Representative Ted Budd (R-NC), Darren Soto (D-FL), Scott Perry (R-PA), and Josh Gottheimer (D-NJ).
Crypto-friendly legislators have expressed optimism about the bill presented in Congress. According to Congressman Ted Budd, the TTA bill would ensure that blockchain technology stays in the US while promoting better investor protections, capital formation, and innovation.
Despite the positive outlook surrounding the TTA bill, some legislators feel this can bring about a regulatory impasse between the Federal arm and State legislation which already has a working crypto plan.
Gabriel Shapiro, a lawyer specializing in the securities market, said the TTA bill could see States finding it hard to monitor cryptocurrencies except fraudulent activities are perpetrated with them. Shapiro opines that this will make the work US crypto-friendly states like Wyoming have put in to become void.
Not Only Legislators Want Crypto Clarity
America's continued impasse concerning crypto's regulatory clarity is becoming a major problem for cryptocurrency companies.
Due to the hazy definition surrounding crypto and what makes it securities, Ripple Labs has seen its growth in the US markets stagnate and rely on the Asian markets to survive.
The Securities and Exchange Commission (SEC) had filed a lawsuit against Ripple and current CEO Brad Garlinghouse alleging that the blockchain company had sold unregulated securities to US investors in 2013.
Ripple has since denied the allegation in a counter-lawsuit asserting that their XRP token should not be seen as a security—as such, the SEC has no right in regulating it.