The introduction of the bipartisan Securities Clarity Act by Representatives Tom Emmer and Darren Soto, aims to provide regulatory clarity for digital assets in the US, addressing the need for a clear distinction between commodities and securities and highlighting its significance in the ongoing legal battle between Coinbase and the SEC.
Representative Darren Soto and Majority Whip Tom Emmer have taken a significant step towards providing regulatory clarity for digital assets in the United States.
They have announced the introduction of their bipartisan Securities Clarity Act, a measure aimed at bringing transparency to the regulatory classification of digital assets and offering market certainty to entrepreneurs while providing regulators with clear jurisdictional boundaries.
About the Securities Clarity Act (H.R. 4451)
Originally introduced in 2021, the legislation seeks to draw a distinct line between commodities and securities, thereby clarifying the regulatory landscape surrounding digital assets. Currently, the lack of a clear definition between an asset and a securities contract.
Representative Emmer argues that without a clear legal definition for commodities and securities, American innovation will suffer. He emphasizes the need for regulatory clarity to foster a thriving digital asset market in the United States.
“So long as we lack a clear definition under the law for what is a commodity and what is a security, American innovation will suffer.”
In a similar vein, Representative Soto highlights the importance of blockchain technology in contributing to the nation’s economy and emphasizes the need to protect investors and customers while maximizing the potential of virtual currencies.
“Blockchain technology contributes to our nation’s economy by allowing innovation to grow. Congress is working to protect those who invest in this technology with the Securities Clarity Act. This bill will add critical definition and jurisdiction to create certainty for a strong digital asset market in the United States. This is an important step in maximizing the potential of virtual currencies for the U.S. economy, all while protecting customers and the financial well-being of investors.”
If enacted, the Securities Clarity Act would treat “property sold under an investment contract, whether tangible or intangible (including an asset in digital form)” differently from securities upon its sale or transfer. This differentiation would bring much-needed certainty and guidance to market participants and ensure that regulatory oversight is appropriate and effective.
Coinbase versus the SEC
The timing of this legislation is noteworthy, as it comes amidst a legal dispute between Coinbase, one of the largest cryptocurrency exchanges, and the Securities and Exchange Commission (SEC). A few months prior, the SEC sent Coinbase a Wells Notice, signaling a potential legal battle on the horizon. In response, Coinbase filed a lawsuit against the SEC, seeking regulatory clarity and guidance.
The ongoing lawsuit prompted the SEC to issue a response to Coinbase’s claims, but it stopped short of addressing the company’s call for significant regulatory changes. The SEC asserted that it does not need to respond to Coinbase’s request for the initiation of rulemaking proceedings.
The introduction of the Securities Clarity Act by Representatives Soto and Emmer signifies a proactive approach to addressing the regulatory challenges surrounding digital assets. This bipartisan effort aims to create an environment that fosters innovation, protects investors, and ensures the long-term growth and stability of the digital asset market in the United States.
As the bill progresses through the legislative process, stakeholders in the digital asset space will closely monitor its developments. Regulatory clarity will not only benefit industry players but also pave the way for responsible and sustainable growth in the digital asset market.
Rickie Sanchez is an article writer specializing in cryptocurrency news. Since late 2017, he has been actively investing in cryptocurrencies. He is enthusiastic about everything that has to do with crypto and he hopes that the readers of his articles in the years to come will gain a massive understanding of blockchain technology.