How does the regulation of Blockchain-based Crypto Asset activities affect the US ecosystem?

Earlier this week, BitcoinExchangeGuide reported that Congressmen Warren Davidson and Darren Soto have announced the Token Taxonomy Act. The main intention behind this act is to provide a clear regulatory environment for companies and companies in the blockchain environment.

The legislation clarifies how to define a digital token and how the securities laws apply to companies that work with blockchain technology. One of the main problems that this bill clarifies is a court case that the SEC uses to determine security.

Congressman Darren Soto said that although legislation is a good first step, he is also looking for feedback to improve it. They worked for several months to create the H.R. 7356 Taxonomy law of tokens. Several participants expressed their opinion on it and on the entire cryptographic space.

Congressman Warren Davidson commented on the issue:

"Providing everything that is really needed frees the SEC to fulfill its vital and indispensable consumer protection obligations against those who have engaged in securities fraud by making false claims or simply by trying to engage in regulatory arbitrage for circumvent the law on securities ".

Let's take a closer look at how this bi-partisan law will affect the blockchain and the encrypted sector

The largest union of cryptographic industry giants, The Blockchain Association, which represents companies such as Coinbase, Circle and Digital Currency Group, said the first version of the project has sufficient guidelines to show that most of the tokens digital devices can be excluded from safety categorization.

They posted a blog post following the announcement of the act in which they stated:

"This legislation proposes a definition of" digital token ", a new term for cryptocurrencies and other network tokens, and explicitly excludes them from the definition of security: digital tokens promote the open exchange of information and value and reduce the potential for fraud. They must be created in accordance with the specified rules, recorded in a decentralized digital ledger and able to be traded without an intermediary. "

Regarding the correlation of the invoice with the existing one SEC policy, added that the SEC's most detailed guidance on this topic comes from a June 14 speech by Bill Hinman, the director of the corporate finance division.

They think that the definition of a digital token and the elements of Hinman's discourse have similarities – both frameworks recognize that decentralization is a key factor in determining whether the application of securities laws makes sense.

Almost like most of the legislation of the initial phase, the bill is not yet perfect. However, the interesting thing is that it was proposed by a bipartisan team, demonstrating a vision for innovation and responsibility that is shared across the corridor. With the new Congress starting in January, we can be confident digital tokens It will be an idea on which we can build.

Jake Chervinsky, defender of government execution and lawyer for securities disputes, said:

"The tax taxonomy law would provide exactly the kind of regulatory clarity that the cryptic sector needs – legislation like this is more important than a non-binding guide by agencies like the SEC."

Although we do not have a clear timeframe for approval, it is good to know that the government is trying to direct the direction of regulation in the right direction.