Bill to exempt cryptocurrency from Securities Laws is now being Reintroduced in Congress.
Warren Davidson introduced the version of 3.0 of the Token Taxonomy Act, which he sponsored previously in 2018 and 2019.
Is the third time a charm?
Representative Warren Davidson (R-Ohio) has reintroduced the Token Taxonomy Act, a bill that will make certain cryptocurrency tokens and other digital assets exempted from US securities laws.
This shows the third attempt by the Ohio congressman to get the House of Representatives to take up the issue. He then introduced it in 2018 and at the end of a legislative session before reintroducing it with minor tweaks in 2019. The legislation has never been scheduled for a vote in the House.
H.R. 1628 will “amend the Securities Act of 1933 and the Securities Exchange Act of 1934 to exclude digital tokens from the definition of a security.”
It could also make crypto-to-crypto transfers tax exempt and change the tax structure for cryptocurrencies that are being held in an individual retirement account.
Congressman Darren Soto, one of the co-sponsors of the bipartisan bill, stated that it would “add critical definition and jurisdiction to create certainty for a strong digital asset market in the United States.”
A press release from Rep. Davidson’s office, it may be now or never to establish a regulatory framework for crypto in the US, something that the industry players have repeatedly stated is lacking.
And yet the bill itself, although endorsed by the nonpartisan Blockchain Association, can produce the wrong kind of regulatory clarity. A federal definition of a digital token could run into opposition from states that have created their rules around cryptocurrency securities, like Wyoming.
Furthermore, according to Gabriel Shapiro, a lawyer that specializes in securities, it might make it really difficult for the states to regulate “any aspect of digital token sales other than full-on fraud.”
“To call this an insult to states’ rights would be putting it very mildly,” he said in 2019. The legislation has not been revised ever since that time.
The bill has been reintroduced to the House Financial Service and House Ways and Means committees.
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