Ohio Congressman To Introduce Bill To Regulate Cryptocurrencies And ICOs Federally
Warren Davidson, a Congressman for the U.S state of Ohio, continues to push for the recognition of cryptocurrency as an asset class and the ‘clear’ regulation of initial coin offerings (ICOs).
The Ohio politician has stepped up his quest, recently announcing plans to introduce legislation for the regulation of cryptocurrencies and ICOs at the federal level, according to a report published on December 3, 2018, by Ohio-based Cleveland.com.
According to the news outlet, Davidson revealed the plans during the Blockchain Solutions conference, a four-day event held in Cleveland to discuss the use of blockchain technology in government applications.
As per the report, Warren’s bill aims at designating cryptocurrencies as an “asset class,” a move that the crypto-friendly politician said would be instrumental in preventing these digital assets “from being classified as securities.”
That, he added, would make it easier for federal authorities to regulate the ICO market more effectively, giving entrepreneurs the “ability to raise capital” in a different way.
Specific details in the congressman’s proposed legislation haven’t been made clear, only that it would be introduced “soon.”
Warren’s push for legislation could be beneficial to the crypto industry by introducing clarity in how the assets are regulated.
At the moment, cryptocurrencies are different things to different regulatory agencies, with classification depending on the agency in question or its jurisdiction.
ICOs have, up until recently, been the most preferred crowdfunding method for many blockchain-based startups that sought to raise funds in exchange for selling tokens to participating investors. Thousands of crypto projects have raised funds in this manner, though many have since failed.
The Securities and Exchanges Commission (SEC) has said that nearly all the crypto tokens issued via ICOs are securities and has begun cracking down on ICO organizers and promoters for violating securities laws.
Conversely, the Commodity Futures Trading Commission (CFTC) views cryptocurrencies as being similar to commodities.
The CFTC has stated that bitcoin has more similarities with gold that it has with currencies or for that matter, securities because BTC is neither government-backed nor does it have any attached liabilities.
To FinCEN (Financial Crimes Enforcement Network), an agency that manages issues related to money laundering and consumer identification, AML and KYC respectively, crypto is money.
The Internal Revenue Service (IRS), on its part, categorizes cryptocurrencies as property. What this means is that any accrued profits an investor gets are subject to taxation, specifically, the capital gains tax.
And finally, to the U.S. Office of Foreign Assets Control (OFAC), an agency that enforces economic sanctions, cryptocurrency is money.
Clear regulations needed
The push to have clear regulatory oversight over cryptocurrencies and ICOs has been ongoing for much of 2018.
In September, U.S. Congressional representatives called on the SEC to work on having clear regulations for the crypto industry. The congressional group sent a letter to SEC Chairman Jay Clayton, in which among other things, they called for “clearer guidelines” on tokens that fall under securities.
Davidson also hosted a roundtable discussion involving representatives from Wall Street firms and crypto platforms. The discussion centered on the issue of clarity in crypto and ICO regulations, with attendees saying that clarity in the space is a matter of urgency for the good of token taxonomy.
The Ohio Republican politician reportedly told the gathering:
“Your input is critical to helping us preempt a heavy-handed regulatory approach that could stall innovation and kill the U.S. ICO market.”
In November, it was reported that Davidson was looking at introducing a House bill that sought to identify ICO tokens as products and not securities, in what seemed to be a move to sidestep the SEC.
But the SEC chair Jay Clayton has maintained that most ICOs are securities and that current securities laws are sufficient enough for the regulation of the ICO space.
Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.