US Lawmakers to Exclude Cryptocurrencies from Securities

US Lawmakers to Exclude Cryptocurrencies from Securities

The “Token Taxonomy Act” has been introduced to the US House of Representatives on Thursday according to the US Congress. The idea is to change a 1933 definition of securities.

Representants Warren Davidson and Darren Soto introduced an ACT “To amend the Securities Act of 1933 and the Securities Exchange Act of 1934 to exclude digital tokens from the definition of a security.”

The Act also looks “to direct the Securities and Exchange Commission to enact certain regulatory changes regarding digital units secured through public key cryptography.”

Also “to adjust taxation of virtual currencies held in individual retirement accounts, to create a tax exemption for exchanges of one virtual currency for another, to create a de minimis exemption from taxation for gains realised from the sale or exchange of virtual currency for other than cash, and for other purposes.”

The amendment would be the base for future actions regarding taxation and the use of crypto assets. At the same time, the Token Taxonomy Act would open the doors for a more natural way to invest in crypto assets such as Bitcoin or Ethereal and the so-called Bitcoin ETF that US regulators have not yet approved.

A new definition of “digital token” by the act that clarifies it is not a security, so it should not be under securities laws. According to the new law, a digital token would be an asset that “has a transaction history that, is recorded in a distributed, digital ledger or digital data structure in which consensus is achieved through a mathematically verifiable process.”

Digital tokens, add the new law, “cannot be materially altered by a single person or group of persons under common control, is capable of being traded or transferred between persons without an intermediate custodian.”

In a statement, Rep. Davidson remembered the early days of the internet, when “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.”

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