U.S. Legislators Resubmit Bill Proposing Exemption of Cryptocurrencies from Securities Laws

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U.S. legislators are reintroducing a bill that would establish the legal status of digital currencies in the country.

On Tuesday, U.S. Representative Warren Davidson resubmitted the Token Taxonomy Act which, if enacted into law, would “send a powerful message” that “the U.S. is the best destination for blockchain technology.”

Initially introduced in 2018 by U.S. Representative Davidson and Darren Soto, the legislation was proposed in an attempt to exempt particular digital assets from existing federal securities laws, providing more freedom for crypto traders to transact using certain cryptocurrencies.

To that end, the bill has introduced a number of amendments to the Securities Exchange Act of 1940 and the Securities Act of 1933, delineating how regulators such as the U.S. Securities and Exchange Commission (SEC) could apply securities laws to digital currencies.

While the SEC has already outlined staff-level guidance for classifying how a token sale can be deemed as securities offerings, it remains uncertain how digital assets that are not utilized for crowdfunding should be categorized.

Alongside Davidson and Darren Soto, the 2019 version of the bill is cosponsored by Representatives Josh Gottheimer, Tedd Budd, and presidential candidate Tulsi Gabbard.

Not including Perry, five of the legislation’s sponsors are members of the House Financial Services Committee.

While largely akin to the bill initially introduced last year, the new version outlines a number of provisions previously not included in the original, including a clearer definition of cryptocurrencies that will be more inclusive of evolving technology.

Furthermore, the bill also delineates provisions which aim to boost consumer protection as well as forestall any prevailing state laws which might pose a conflict with the proposed legislation.

While the 2018 Congressional session has already been concluded before the House Financial Services Committee or House Ways and Means Committee could put the proposal into a vote, Blockchain Association’s acting head noted that the group is “pleased to support the re-introduction of the Token Taxonomy Act,” adding that:

“In light of the recent SEC staff guidance, the open blockchain industry needs regulatory clarity more than ever. We believe that blockchain technology has tremendous potential and that we need smart, simple, and supportive legislation to make sure that the United States continues to be a leader in this ecosystem. We are grateful for the bill’s sponsors for their continued support for this vital technology.”