Legislation Is Coming to Regulate Both Crypto and ICOS, Announces US Congressman
The Unites States is slightly behind other countries that have worked to establish regulations for the cryptocurrency world. However, congressman Warren Davidson has expressed the intent to bring in legislation that would clearly outline the regulations imposed upon cryptocurrency and initial coin offerings (ICOs), according to Cleveland.com.
The news agency said that this annoucement took place at the Blockchain Solutions Conference, and it would essentially make cryptocurrencies into an asset class. As such, the new class:
“would prevent them from being classified as securities but would also allow the federal government to regulate initial coin offerings more effectively.”
Considering how much uncertainty has been in the US lately, this decision would likely make trading, purchases, and other crypto transactions much easier.
Presently, the only classification has been from the Securities and Exchanges Commission (SEC), who has deemed that the majority of crypto assets to be securities. However, the Commodities Futures Trading Commission (CFTC) holds a much different stance, saying that cryptocurrencies are more like commodities, which is similar to the Internal Revenue Service’s (IRS) view – that crypto is property. Since crypto can be sold for a profit, the IRS also says that the profit can be taxed.
Essentially, the CFTC sees Bitcoin as being something like gold, rather than a form of currency. Bitcoin doesn’t have government backing and there’s no liability linked to it. Still, cryptocurrency is viewed as a form of money by the Financial Crimes Network. The U.S. Office of Foreign Assets Control (OFAC) also sees cryptocurrency as money, though they also have the power to blacklist wallets, which is exactly what they do to sanctioned persons.
By finally establishing concrete terms about cryptocurrencies, there wouldn’t be problems like this in the industry, and investors could just focus on their transactions. Multiple representatives from the U.S. Congress collaborated in a letter to Jay Clayton, the SEC chairman, to establish “clearer guidelines between those digital tokens that are securities” in September.
Also, in September, a Congressional roundtable took place to discuss both ICO and crypto regulation, which included the attendance of over 45 representatives from both the crypto and traditional finance industries. The meeting brought to light many of the concerns surrounding the lack of regulatory clarity, while introducing a discussion on “token taxonomy.”
Davidson has voiced his support for the crypto industry before but realized that ICOs need a “light touch” of regulation. If the bill is passed that he has brought up, then ICOs would be considered products at both a federal and state level, which means they would no longer be subjected to security laws.