U.S. bill to exempt cryptocurrency from securities laws
U.S. Reps. Warren Davidson, R-Ohio and Darren Soto, D-Fla. introduced the “Token Taxonomy Act” which excludes digital and cryptocurrencies from the U.S.’ definition of a security and security laws.
“In the early days of the internet, Congress passed legislation that provided certainty and resisted the temptation to over-regulate the market. Our intent is to achieve a similar win for America’s economy and for American leadership in this innovative space,” Davidson said in a statement.
The “Token Taxonomy Act” would amend the Securities Act of 1933 and Securities Exchange Act of 1934.
The Securities Act of 1933 “require that investors receive financial and other significant information concerning securities being offered for public sale; and prohibit deceit, misrepresentations, and other fraud in the sale of securities,” according to the U.S. Securities and Exchange Commission.
The Securities Exchange Act of 1934 filled the gaps that the Securities Act of 1933 left. “This includes the power to register, regulate, and oversee brokerage firms, transfer agents, and clearing agencies as well as the nation’s securities self-regulatory organizations (SROs),” according to the U.S. Securities and Exchange Commission.
“Token Taxonomy Act” defines what digital tokens are and are not. The bill states digital tokens are “digital united created… in response to the verification or collection of proposed transactions” and “…not a representation of a financial interest in a company, including an ownership or debt interest or revenue share.”
“This bill provides the certainty American markets need to compete with Singapore, Switzerland, and others who are aggressively growing their blockchain economies,” Davidson said in a statement.