‘American Innovation Will Suffer’: Lawmakers Demand Clear Rules For Crypto

The ‘lack of clarity’ continues to be a ‘challenge,’ lawmakers argue

article-image

lazyllama/Shutterstock, modified by Blockworks

share

“American innovation will suffer” without clarity on what is a commodity and what is a security, Majority Whip Tom Emmer said.

The bipartisan Securities Clarity Act was announced by Emmer and Representative Darren Soto on Thursday.

“Existing securities law does not distinguish between an asset and the securities contract it may or may not be part of,” the press release said. It added that it’s arguable that many crypto projects do start as securities; however, they no longer fall under the current securities legislation once the projects mature.

In the draft of the bill, it states that it will update regulatory laws so that an “asset sold pursuant to an investment contract, whether tangible or intangible (including an asset in digital form) that is not otherwise a security under the act, does not become a security” following a sale or transfer. 

Separating an “investment contract asset,” which is what the Act aims to do, would make it different from the securities offering it was originally a part of — basically making the definition “technology neutral.”

The Securities Clarity Act was first introduced in 2020 by Emmer.

The newest legislation was announced this week as the SEC faces off with multiple crypto companies.

In March, the SEC served Coinbase with a Wells notice — essentially warning them of pending SEC action. In return, Coinbase sued the SEC, demanding regulatory clarity. A court forced the SEC to respond to Coinbase.

Earlier this week, the SEC told Coinbase, “Deliberating over the kind of significant changes sought by Coinbase, which could affect both crypto assets and the securities markets more generally, takes time — including, as here, time to weigh whether or not to initiate a rulemaking proceeding about such topics in the first instance.”

Meanwhile, in the SEC case against Ripple, a judge ordered the SEC this week to unseal the Hinman docs — a series of drafts and emails related to a speech given by Wiliam Hinman over four years ago. 

In his speech, Hinman asserted that the SEC did not consider ether a security at the time, which could aid Ripple in its case to understand why the SEC considers XRP a security.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Permissionless is a conference for founders, application developers, and users. Come meet the next generation of people building and using crypto.

recent research

Unlocked by Template (2).jpg

Research

Vertex has established itself as a formidable player in the perps DEX landscape. Its strategic approach to chain expansion, focusing on EVM-compatible networks and leveraging incentive programs, has proven largely successful. The reduced time-to-launch for each new chain integration highlights the team's growing expertise and the scalability of their technology. As Vertex continues to expand, it is well-positioned to capitalize on the increasing fragmentation of the perpetual DEX market, potentially consolidating liquidity across multiple chains through its Edge technology.

article-image

Crypto hasn’t pumped in a while. Are we close to a bear market?

article-image

Solana veteran team launches validium blockchain optimized for DeFi

article-image

Sponsored

By collaborating to proactively identify and disrupt illicit activity, the T3 FCU aims to promote security and prosperity across the TRON network and beyond

article-image

Plus, the latest entrant into the crypto fund game

article-image

The goal of Tuesday’s inaugural Congressional hearing on DeFi was to “explore emerging topics” in digital assets, Rep. French Hill said

article-image

Blockworks Research analyst predicts 2025 will be a big year for economic changes on Solana