December 21, 2018 | AtoZ Markets - U.S officials have recently opened the file of cryptocurrency for a potential change of defining them as a security.
The congressmen, Warren Davidson, R-Ohio and Darren Soto, D-Fla, introduced on Dec. 20th a bill for excluding digital currencies from being defined as a security, which sounds to have come in response to voices that started to raise saying that the industry’s law is today outdated and needs amendment, as per media reports.
As the news was detailed, the "Token Taxonomy Act" — a bipartisan bill the above mentioned representatives introduced, defines a "digital token" and makes it clear that cryptocurrencies do not fall under securities laws once they become a fully functioning network.
"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," said Davidson in a statement.
The purpose behind modifying the is protecting the consumer, as retail investors were said to have made speculative bets on bitcoin and other digital currencies the last year, which reflected in many losing capitals and funds due to the recent bitcoin crises, with the latter down 71 percent this year while the second largest digital currency XRP, is down 85 percent this year also.
Hence, the claim for newer laws with regard to cryptocurrencies have floated to the surface recently, with the current securities law turning 72-years this year.
The Supreme Court had determined in 1946 that any transactions that qualify as "investment contracts" are considered securities, and in its turn, the SEC said then that an investment contract exists if "a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party."
Apparently, the issue has been taken seriously at a congressional level this month, as AtoZ Markets reported earlier this month, that both cryptocurrencies and ICOs were in a heated discussion among congressmen.
Warren Davidson was reported to have announced plans for regulating cryptocurrencies and ICOs at the Blockchain Solutions conference that was held by the beginning of the on-going month.
The congress official had presented a bill on Dec. 03, in which he was pushing for creating an “asset class” for cryptocurrencies and digital assets, in pursues of changing their definition as securities, with a wider margin the bill gives to the federal government for regulating ICOs “more effectively”, as per the congressman’s description.