U.S.Rep. Warren Davidson (R) has announced plans to introduce legislationthat would clearly regulate cryptocurrencies and Initial Coin Offerings (ICOs), local Ohio news agency Cleveland.com reportsDec. 3.
According to Cleveland.com, Davidson announced his intention to introduce new legislation at the Blockchain Solutions conference. The bill would create an “asset class” for cryptocurrenciesand digital assets, which “would prevent them from being classified as securities, but would also allow the federal governmentto regulate initial coin offerings more effectively.”
This development would bring clarity to U.S. crypto regulation. Currently, state regulatory agencies classifytokens differently in ways that place them under their jurisdiction.
The Securities and Exchanges Commission (SEC) stance is that most cryptocurrencies are securities. The Commodity Futures Trading Commission (CFTC), on the other hand, treats cryptocurrencies as commodities.
In other words, the CFTC states that Bitcoin (BTC) has more in common with gold than with currencies or securities since it is not backed by a government and does not have liabilities attached to it. The Financial Crimes Enforcement Network (FINCEN), the agency managing anti-money laundering (AML) and know your client (KYC) standards, views crypto as money.
The U.S. Office of Foreign Assets Control (OFAC), which enforces economic sanctions, views crypto as money and blacklists wallets of sanctioned persons. Lastly, the Internal Revenue Service (IRS) treats cryptocurrencies as property, meaning that profits from selling them are subject to capital gains tax.
A group of U.S. Congressional representatives senta letter in September to the SEC Chairman Jay Clayton calling for “clearer guidelines between those digital tokens that are securities.”
The same month, over 45 representatives of major crypto companies and Wall Streetfirms attended a Congressional roundtable discussion on cryptocurrency and ICO regulation. During meeting, which was hosted by Davidson, experts expressed concerns about a lack of regulatory clarity in the industry and discussed “token taxonomy.”
Davidson has previously demonstrated his support for the crypto industry, suggestingthat the ICO market needs “light touch” regulation. A spokesman for the U.S. representative said in November that Davidson is workingon a bill that, once law, would treat ICOs as products rather than securities at the federal and state level, effectively “sidestepping” security laws.
As Cointelegraph reportedyesterday, seven Ohio funds will hand over $300 million to blockchain startups by the end of 2021. Of this funds, $100 million will be invested by nonprofit JumpStart.