Congressman Emmer Introduces Bill to Clarify Status of Digital Assets
On May 18th, Representatives Tom Emmer and Darren Soto introduced a bill with the aim of clarifying the status of digital assets under the relevant securities laws. The aptly named Securities Clarity Act aims at providing greater regulatory clarity and certainty to cryptocurrency firms.
New Bill Seeks to Offer More Clarity on What Can Be Considered a Security
This Thursday, Representatives Tom Emmer and Darren Soto introduced the Securities Clarity Act in Congress. The new bill seeks to provide greater regulatory certainty and clarity to digital assets companies.
The representatives argue that without a proper distinction between a securities contract and the asset, various token projects “cannot move out of the securities framework once the project is decentralized” after raising initial capital for needed development. The bill seeks to rectify the problem by introducing the concept of the “investment contract asset”.
The Securities Clarity Act inserts a key term, the “investment contract asset,” into existing securities law to enable crypto projects to reach their full potential in a compliant way, allowing the United States to compete globally in this next iteration of the internet.
According to a post made by Representative Emmer on Twitter, multiple well-known digital assets organizations participated in the creation of the bill. These include Coin Center, the Blockchain Association, the Chamber of Digital Commerce, and the Crypto Council for Innovation.
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Crypto Industry’s Search for Regulatory Clarity
The topic of regulatory clarity has become increasingly relevant for the cryptocurrency industry over recent months. Multiple companies that have been targeted by the Securities and Exchange Commission have claimed that the SEC has repeatedly failed to offer them readable guidelines before initiating enforcement actions.
The most notable of these companies is the cryptocurrency exchange Coinbase which received a Wells notice earlier this year. The company’s CLO, Paul Grewal, has since stated that, despite approaching the SEC several dozen times over the course of nine months, his firm failed to receive a straight answer on which digital assets the Commission considers to be securities.
The issue is perhaps best exemplified by the testimony Gary Gensler gave Congress several weeks ago in which he evaded to offer a direct answer on whether ETH can be considered a security. In recent months, the situation gave rise to an increasing number of calls upon lawmakers to offer much-needed clarity.
Do you think Representative Emmer’s bill could protect the cryptocurrency industry from overbearing enforcement actions? Let us know in the comments below.