ssCongress Set To Review Two Bills Aiming To Bring Regulatory Clarity To The Crypto Development Space
Two bills were introduced to the U.S. House of Representatives on Thursday aiming to promote blockchain development and digital tokens in the United States.
The Securities Clarity Act of 2020 aims to make clear which cryptocurrencies are securities and the Digital Commodity Exchange Act of 2020 suggests having the Commodities and Futures Trading Committee supervise the development of a federal regulatory framework for token trading platforms.
The Securities Clarity Act of 2020 is championed by co-chair of the Congressional Blockchain Caucus and Ranking Member of the House Committee on Financial Services’ FinTech Task Force, Representative Tom Emmer (R-MN). If passed, the bill would resolve the lingering question of whether digital tokens issued as a part of investment contracts are themselves securities.
This issue is at the heart of the controversy which resulted in Telegram canceling plans for its planned open network and Gram tokens. In October of 2019, the U.S. Securities and Exchange Commission sued the messaging giant for holding an unregistered token sale after the company raised $1.7 billion dollars for its project through two private token sale rounds in 2018. The Securities Clarity Act of 2020 would make clear that digital tokens included in investment contracts are not necessarily securities and thus would not be subject to suit by regulatory bodies like the SEC.
“This bill would bring the U.S. into greater alignment with the regulatory approach taken in other major jurisdictions and will foster the development of blockchain technology here without compromising on investor protection when actual securities are sold or traded,” Lewis Cohen, Co-founder of Chamber Member DLx Law said.
The Digital Commodity Exchange Act (DCEA) was introduced by Representative Mike Conaway (R-TX) of the House Committee on Agriculture and seeks to simplify the licensing process for token trading platforms by directing them towards the Commodities and Futures Trading Commission. DCEA would mean that token trading platforms would no longer need to knit together state-by-state licenses to expand operations. Coming under the purview of the CFTC, which reports to the Agriculture Committee — would also mean that Representative Conaway’s position on the committee will likely cause him to become a more prominent figure in the crypto community.
By Emily Mason