US lawmakers introduced a bill on Thursday that aims to clarify how digital assets are labeled, through a new term coined “investment contract assets”.
Reps. Tom Emmer, R-Minn., and Darren Soto, D-Fla., reintroduced the Securities Clarity Act with the support of crypto advocacy groups in Washington, DC.
Emmer first introduced a bill in 2020 that would define an “investment contract asset” as distinct from an offering of securities.
“This definition is technology-neutral and shall apply to all assets sold or offered that would be considered ‘securities’ solely because of their inclusion in the investment contract,” according to a statement From Emmer’s office.
Without a distinction between an asset and a securities contract, token projects seeking to raise capital in the early stages would not be able to “go out of the securities framework” after decentralization of the project, preventing these tokens from being used for their utility, which is only tokenization. holders,” his office said.
Crypto groups applauded the bill’s move to differentiate between an investment contract and an underlying asset.
Perrianne Boring, Founder and CEO, said, “The Securities Clarity Act is an important piece of legislation that will greatly benefit investors, consumers and businesses by confirming the difference between an investment contract and a digital asset sold or transferred under the terms of an investment contract.” provides the necessary certainty.” In a statement from the Chamber of Digital Commerce.
long history
A 1946 US Supreme Court case, often referred to as the Howe Test, determined whether a transaction qualified as an investment contract and would therefore be considered a security.
The US Securities and Exchange Commission has repeatedly referred to it when deciding which cryptocurrencies are securities.
SEC Chairman Gary Gensler has said the most cryptocurrency Investing under the Howey Test.
“My predecessor Jay Clayton said this, and I will repeat it: without prejudice to any one token, most crypto tokens are investment contracts subject to the Howe test,” Gensler said in September.
