US Congressmen Call on SEC for Regulatory Clarity Regarding Cryptocurrencies

A group of lawmakers from the U.S. Congress has sent a letter to Securities and Exchange Commission (SEC) Chairman Jay Clayton, calling for regulatory clarity regarding cryptocurrencies, CNBC reported September 28.

According to CNBC, more than a dozen congressmen asked Clayton to tell investors how the SEC plans to regulate digital currency. The lawmakers requested clarity on the criteria for identifying digital tokens as “investment contracts” and therefore securities, in addition to a  description of the tools the SEC will use to provide more concrete guidance to innovators in the field. The letter reads:

"It is important that all policy makers 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 reportedly expressed their concerns regarding uncertainty surrounding the treatment of offers and sales of digital tokens because, in their view, it impedes innovation in the U.S. and could eventually drive business to other jurisdictions.

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.”

On Sep. 26, congressman Warren Davidson hosted a “crypto roundtable” with over 45 representatives from major Wall Street firms and crypto companies. Experts expressed their concerns regarding possible regulations of the crypto space and told lawmakers that there is a pronounced lack of regulatory clarity for Initial Coin Offerings (ICOs) and digital currencies.

Some of the participants argued that current regulations were not only vague, but outdated. Joshua Stein, CEO at crypto-security firm Harbor, stated that securities regulations “do not work” in regard to utility tokens in decentralized apps (DApps). He added that current securities laws are only appropriate for traditional securities, and “they are not good fit” for the ICO industry.