American congressman Warren Davidson announced plans to implement laws that would better regulate cryptocurrencies and ICO in the US. Information was provided last Monday by the local news agency in Ohio Cleveland.com.
According to Cleveland.com, Congressman Davidson announced his intention to introduce new regulations at the Blockchain Solutions conference. The law would create a special ‘asset class’ for cryptocurrencies and digital assets, which ‘would prevent them from being classified as securities, but would also allow the federal government to regulate the ICO more effectively’.
Clear regulations are needed because state regulatory agencies currently classify tokens and cryptocurrencies in different ways. This introduces legal chaos.
What exactly are cryptocurrencies?
Let’s see how the status of digital currencies in the US is ambiguous. According to the Securities and Exchange Commission (SEC), the majority of cryptocurrencies are securities. In turn, the Commodity Futures Trading Commission (CFTC) treats cryptocurrencies as goods.
In other words, the CFTC states that Bitcoin (BTC) has more to do with gold than with currencies or securities because it is not supported or issued by the government. The Financial Crimes Enforcement Network (FINCEN), an agency dealing with money laundering (AML) and KYC standards, perceives cryptocurrency as a form of money.
The US Foreign Assets Control Office (OFAC), which enforces economic sanctions, views cryptocurrencies as money. Finally, the Internal Revenue Service (IRS) treats cryptocurrencies as assets, which means that profits from their sale are subject to capital gains tax.
Let’s regulate crypto!
Earlier, a group of US Congressional representatives sent a letter to the chairman of the Security Commission, Jay Clayton, in which he called for “clearer guidelines between these digital tokens, which are securities.”
At the same time, over 45 representatives of major US cryptocurrency companies took part in the Round Table discussions on the market and regulation of ICO. During the meeting, hosted by the Congressman Davidson, experts expressed their concerns about the lack of clarity of regulations.
Davidson suggests that the ICO market requires a “light approach” from regulators. The politician is working on a law that treats ICO tokens as products rather than securities at the federal and state level.