Lawmakers Submit Token Taxonomy Act Bill to Exempt Crypto Assets from US Securities Laws Again
Defining cryptocurrencies has been an ongoing difficulty in the industry as multiple branches within the United States have different ways to govern it. However, one ongoing debate is over whether certain tokens should be considered securities.
US Representative Warren Davidson is aiming to withdraw any concerns in the matter by bringing back a bill that was already seen last year, allowing cryptocurrencies to be free of these laws.
The bill, called the Token Taxonomy Act, was brought to Congress for the second time on Tuesday, as Davidson stated that its approval would “send a powerful message” to the innovators in the industry. Davidson believes that making the US the “best destination for blockchain technology” would benefit both the crypto market that this fintech resides in, while bringing business into the United States.
The bill was originally introduced by Reps. Davidson and Darren Soto, aiming to make it easier to trade with certain crypto assets.
The bill would be an amendment to two acts that have been in place for decades – the Securities Act of 1933 and the Securities Exchange Act of 1940. It would provide new clarity within the US Securities and Exchange Commission (SEC), along with the crypto market, regarding the ways to enforce their own laws on various tokens.
Right now, there’s staff-level guidance for the SEC to show how to figure out if token sales should be considered securities offerings. However, there is still no clarity on how to classify the tokens that are not used in fundraising efforts for exchanges and cryptocurrencies. So far, the bill has been cosponsored by Reps.
Josh Gottheimer, Tedd Budd, Scott Perry and Tulsi Gabbard in this year’s version. The House Financial Services Committee is the home to five of these cosponsors.
While the two bills are incredibly similar, the latest version will have clarity on how to define digital tokens, among other improvements. There are also new rules regarding consumer protection, and those rules will supersede any that the states have previously imposed.
The full bill for the changes can be viewed here: