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

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


lazyllama/Shutterstock, modified by Blockworks


“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.

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

MON - WED, MARCH 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience:  Attend expert-led panel discussions and fireside chats  Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts   Grow your network […]

recent research

Pyth Cover.jpg


Pyth is a low latency pull-based oracle. In a future that looks increasingly high frequency, with various alt L1s and L2s that have significantly shorter block times than Ethereum, and an explosion of “high-frequency” protocols such as oracle or CLOB perp DEXs, Pyth’s low latency oracle product looks much better positioned to capture a significant amount of market share in comparison to competitors.


It’s unclear what “actions” the CFTC, DOJ and Treasury will announce Tuesday afternoon


Some 18,000 accounts have already sent $27 million in crypto to a one-way bridge controlled by a Blast multisig


Telegram bots have seen a cumulative trading volume of over $4 billion


Avalanche has been inundated with transactions for inscriptions, similar to the Ordinals that already hit Bitcoin, Litecoin and Dogecoin


Like much of the tech world, crypto’s use of ChatGPT has been growing. Despite founder Sam Altman’s ouster, decentralized AI projects don’t seem ready to replace it


The allegations came in a new lawsuit filed by the US securities regulator on Monday