U.S. Representatives Ask SEC For Clarity On Crypto Regulation

U.S. Representatives Ask SEC For Clarity On Crypto Regulation

News Regulation
September 29, 2018 by Sandra Onyeiwu
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In an effort to get more clarity on the regulation of digital currencies, a number of Congress have signed a letter asking Securities and Exchange Commission (SEC) Chairman Jay Clayton to clarify the guidelines the agency uses to determine whether cryptocurrency assets are securities under federal law. The U.S. representatives wrote in the letter, “It is important
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In an effort to get more clarity on the regulation of digital currencies, a number of Congress have signed a letter asking Securities and Exchange Commission (SEC) Chairman Jay Clayton to clarify the guidelines the agency uses to determine whether cryptocurrency assets are securities under federal law.

The U.S. representatives wrote in the letter, “It is important that all policymakers work toward developing clearer guidelines between those digital tokens that are securities, and those that are not, through better articulation of SEC policy, and, ultimately, through formal guidance or legislation.”

The congressmen also said in the letter “We… believe that formal guidance may be an appropriate approach to clearing up legal uncertainties which are causing the environment for the development of innovative technologies in the United States to be unnecessarily fraught.”

The lawmakers further asked Clayton to answer three specific questions regarding the legal status of ICO tokens and other cryptocurrency assets, including whether he agreed with a statement by William Hinman, director of the SEC’s division of corporation finance, which indicated that a token that was originally sold as an investment contract — i.e., a security — could later shed that label.

Hinman had specifically stated that he did not believe ether should be regulated as a security, despite the fact that it was originally funded through a token presale.

The Securities and Exchange Commission’s leading authority on bitcoin, cryptocurrency and initial coin offerings (ICOs) has ruled that some well-known cryptocurrencies like bitcoin and Ethereum are not securities. However, the coins offered during initial coin offerings very likely are entirely — or mostly — securities.

 

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