Congressman Tom Emmer Proposes Digital Asset Classification Bill
Congressman Tom Emmer (R-MN) has proposed a new bill with the goal of providing regulatory clarity and defining the classification of digital assets in the United States. The bill, known as the Securities Clarity Lawseeks to differentiate digital assets from securities contracts and ensure that cryptocurrency projects can operate within a compatible regulatory framework.
Tom Emmer explained on Twitter on May 18 the need to distinguish between digital assets and securities contracts. He noted that without such a distinction, projects that initially raise capital through securities offerings would remain subject to securities regulations even after decentralization is complete.
TOM EMMER INTRODUCES THE VALUES CLARITY ACT WITH REP. DARREN SOTO
By modifying existing securities laws, the Values Clarity Act, endorsed by Representative Darren Soto, introduces the term “investment contract asset” to better suit cryptocurrency projects. This addition is intended to allow cryptocurrency projects to operate in a compatible manner and allow the United States to compete globally in the evolving internet landscape.
Today, I introduced the Securities Clarity Act with @RepDarrenSoto. This bill clarifies the regulatory classification of digital assets and provides market certainty for innovators and clear jurisdictional boundaries for regulators. pic.twitter.com/xgsLAm2Yhh
— Tom Emmer (@GOPMajorityWhip) May 18, 2023
“This law will add critical definitions and jurisdiction to create certainty in a strong digital asset market in the United States,” said Representative Darren Soto. “This is an important step to maximize the potential of virtual currencies for the US economy, while protecting customers and the financial well-being of investors.”
Over the past several years, the US Securities and Exchange Commission (SEC), under the leadership of Gary Gensler, has classified various cryptocurrency projects as securities based on the presence of a “investment contract” and its coincidence with the definition established by the Howey test.
Under current US law, an investment contract refers to a transaction in which an individual invests money in a common enterprise with the expectation of earning a profit from the efforts of a third party. However, the cryptocurrency industry has argued that the existing Securities Law does not adequately address the needs of the sector.
The Securities Clarity Law has received support from various players in the cryptocurrency communityincluding organizations like Coin Center, Chamber of Digital Commerce, Crypto Council for Innovation, and Blockchain Association.
Lawmakers advocate for clear regulation of digital assets
Although this bill represents Congressman Emmer’s efforts to provide regulatory clarity to the digital asset industry, it is not the first attempt by US lawmakers to introduce legislation in this space. In the past, Senators Cynthia Lummis and Kirsten Gillibrand Introduced a Bipartisan Cryptocurrency Bill to the Senatereflecting the growing recognition of the need for comprehensive regulatory frameworks within the industry.
As the cryptocurrency industry continues to expand, it is vital that Congress develop an effective regulatory framework that supports growth and innovation. The introduction of the Values Clarity Act by Congressman Tom Emmer signals a positive step to address these concerns and foster a regulatory environment conducive to the development of the digital asset industry in the United States.