New bipartisan legislation would designate digital assets such as bitcoin, etherium and other emerging technologies as commodities.
By categorizing digital assets as commodities instead of securities, the Securities Clarity Act would allow start-ups to sell and trade cryptocurrencies without being required to register them as securities with the Securities and Exchange Commission (SEC).
The bill was introduced yesterday by Rep. Tom Emmer (R-Minn.), Rep. Darren Soto (D-Fla.), and Rep. Ro Khanna (D-Calif.).
Emmer, who is the bill’s lead sponsor and a member of the Congressional Blockchain Caucus, said the “uncertainty” of regulation has stifled the digital asset industry’s growth in the U.S.
“These assets are in fact, and always were, commodities,” Emmer said in a press release.
The Securities Clarity Act states that an investment contract asset (a new category of investment the bill would create) is separate and distinct from the securities offering that it may have been a part of.
“There has been an unreasonable approach by regulators as to how federal securities laws should be applied to transactions involving the sale of blockchain-based tokens, and this lack of clarity is hurting American innovation, Emmer said.
“Between regulation by enforcement and the varying legal decisions regarding the classification of these assets, regulatory uncertainty has hindered the growth of blockchain technology, leaving many to take the technology overseas,” he added.
The bill is designed to be a technology-neutral bill, Emmer said. It would apply equally to all assets, tangible or digital, and states an investment contract asset, like a digital token, is separate and distinct from the offering it may have been a part of.
“As Congress works to protect those who invest in this technology, the Securities Clarity Act will add critical definition and jurisdiction to create certainty for a strong digital asset market in the United States,” Soto said. “This is an important first step in promoting innovation and maximizing the potential of virtual currencies for the U.S. economy, all while protecting customers and the financial well-being of investors."
Emmer has been vocal about the fact that he is no fan of current of crypto regulation. At a financial services hearing in June, he said uncertainty and fear of enforcement is driving entrepreneurs offshore.
“Over the last few years I’ve been fortunate to meet with many great crypto and blockchain innovators. A common refrain during our discussion is that they so badly want to develop their crypto and blockchain ideas right here in the United States. But they don’t because of continuing uncertainty with crypto regulation,” Emmer said.
Emmer originally introduced the bill in September 2020 with a fellow Republican. By adding two Democratic co-sponsors, Emmer is hoping to improve the chances of moving the bill through the Democrat-controlled House. The bill has been endorsed by the Blockchain Association, Chamber of Digital Commerce and Coin Center.