Cryptocurrencies in the United States will no longer be securities?
The US lawmakers recently introduced a bill that allows digital currencies to be removed from a security definition approved 72 years ago.
The news seems boring, but it’s the one that causes heated discussion – the crypto industry members, for example, assert that the existing legislation is behind the times.
“At the dawn of the Internet, Congress passed a law that provided clarity and opposed the desire to overregulate the market. We want to achieve a similar effect in the American economy to ensure the leadership of our state in this innovative space,”say the supporters of the new bill.
Now for the classification of investment proposal as security, a Howey test from 1946 is used. According to it, any transaction that has the characteristics of an investment contract automatically becomes a security.
But experts are sure: some nuances should be considered.
“Decentralized networks do not really fit into the current regulatory structure. Today we are taking a step towards finding the right way to regulate them,”said Kristin Smith, the head of the US Blockchain Association, who lobbies for the interests of the industry in Washington.
Earlier, SEC head Jay Clayton made it clear that he was not going to change the current standards and adapt them to digital assets. The Commission continues to classify the initial coin offerings as securities offering, excluding from the general pattern only Bitcoin and Ethereum regulated by the Commodity Futures Trading Commission (CFTC).
The supporters of crypto industry are proposing to amend the Securities Act of 1933 and the Securities Exchange Act of 1934, adding to them the definition of a digital token. This does not mean that cryptocurrencies will not be regulated at all. It means that the industry will come under the control of the Federal Trade Commission and the CFTC.
In addition, the authors of the bill encourage SEC to change the principles of virtual currencies taxation by making the exchange of one cryptocurrency to another a non-taxable event and setting a minimum limit that will allow the transactions below a certain limit to be exempted from tax.
The development of the bill was carried out for several months. More than 50 industry participants, including representatives from Fidelity, Nasdaq, State Street, Andreessen Horowitz, and the US Chamber of Commerce took part in the discussion of regulatory issues held in September.
The last meeting of the Congress is likely to take place this Friday. After that, the proposal will have to be drawn up again when the control goes to the Democrats.