It was revealed in a press release published on the 20thth In December, US representatives Warren Davidson and Darren Soto introduced a new bill called the "Token Taxonomy Act". This act seeks to exclude cryptocurrencies from being classified as titles. If the bill is approved, the digital currency will no longer be subject to US securities laws, once the projects become fully functioning networks.
Security generally refers to any financially negotiable asset. Laws on US securities originated in the Securities Act of 1933 and the Securities Exchange Act of 1934. These acts produced a method for determining whether an investment qualified as security. This method was Howey's test.
Howey's test asks if an investment has the criteria to be classified as a security. According to FindLaw these four criteria are:
- It is a money investment
- C & # 39; is an expectation of profits from the investment
- The investment of money is in a joint venture
- Any profit derives from the efforts of a promoter or a third party.
Cryptocurrency tokens meet these criteria because people invest in these tokens with the profitability of a third party, the token project team.
However, the proposed new bill claims that such a modern and complex market as cryptocurrency can not be considered compliant with the legal standards created 70 years ago. This is a position held by many in the industry as the senior market analyst for eToro, Mati Greenspan:
Excellent! When we talk about programmable money, the old rules simply no longer apply.
If passed, this bill will delete the Howey test and create a new framework for cryptographic resources. 🤞https: //t.co/1dSSRReW0U
– Mati Greenspan (@MatiGreenspan) December 20, 2018
If the efforts of these two members of Congress succeed, it could lead to the emergence of specific regulations on cryptocurrency in the United States.
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