Fifteen members of the Congress are in the crypto news around regulation recently, after signing a letter and asking the Securities and Exchange Commission (SEC) and its Chairman, Jay Clayton, to clarify the guidelines that the agency uses to determine whether cryptocurrency assets are securities under the federal law.
The letter has already been signed by 15 lawmakers across the political spectrum. In it, the members are asking Chairman Clayton what precisely makes an ICO token or a security – and how he is planning to address the concerns that the SEC’s failure to list definitive guidance is leading many startups out of the country.
“Current uncertainty surrounding the treatment of offers and sales of digital tokens is hindering innovation in the United States and will ultimately drive business elsewhere.”
Later in the letter, the legislators also question the SEC’s decision to use enforcement actions and clarify policy on cryptoassets.
“We believe that the SEC could do more to clarify its position. Additionally, we are concerned about the use of enforcement actions alone to clarify policy and 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 also asked Clayton to answer three specific questions related to the legal status of ICO tokens and other cryptocurrency assets.
The publication of the letter comes days after Representative Warren Davidson – who is one of the co-signers of the latter – hosted an ICO summit on Capitol Hill in which the representatives from the cryptocurrency and mainstream financial industries asked the Congress to provide a clear regulatory framework for blockchain innovation.
You can read the full letter by clicking on this link.
Japanese Exchanges Demand Tax Reforms From Regulators
- Citizens who must pay tax on their cryptocurrency holdings should be granted a three-year grace period to obtain necessary documentation/registration information (before fines become applicable).
- Cryptocurrency derivative transactions should be taxed separately, and the transfer of losses should be allowed (as one of the main things Japanese exchanges need)
- Small-scale cryptocurrency transactions should not be subject to taxation.
- Cryptocurrency issuance from initial coin offerings (ICOs) should be recognized as a capital transaction rather than taxable income.
- Special tax laws and tax breaks should be introduced for certain investment deals involving cryptocurrency projects.
Circle Expands To Bermuda Due To Pro-Crypto Regulation
“While many governments around the world have not kept pace with the regulatory requirements driven by rapid innovation in digital asset businesses and crypto, Bermuda has leapt forward with an exceptionally well designed and comprehensive regulatory framework: the Digital Assets Business Act of 2018 (“DABA”). […]The Circle announcement goes further:
“Bermuda’s pioneering approach is the kind of regulatory framework we’ve long advocated to unleash growth in the crypto industry. Moreover, we’ve witnessed first hand that the Bermuda government is prepared to iterate and evolve new regulatory rules alongside the pace of technical innovation in the crypto and blockchain field.”The Bermuda subsidiary of Circle will offer all kinds of crypto services including custody. The company says it will be the first major company to approach this country since the DABA passage last year. Circle is the owner of Poloniex which is still a popular crypto exchange. The post also notes that the international users will be able to access the exchange via the new subsidiary called Circle International Bermuda. Circle expands to Bermuda mainly because of the great regulatory climate but they say that the upcoming features will not be immediately available for US customers due to the US regulations. Jeremey Allaire, the CEO of Circle, stated that the regulatory climate in the United States is muddy and is the reason why he had to lay off some of his employees. He also stated that the new Bermuda expansion will open 30 new job positions. As noted in some of the best cryptocurrency news sites, the volumes on Poloniex have fallen dramatically over the past few years and in the 24-hour period at press time, the exchange done just over $15 million. Some believe that this is a move to save Poloniex from crashing since its influence dropped after Binance joined the market. Binance had a trading volume which was at least 10 percent higher than Poloniex did in just a day.
Crypto Laws In Switzerland: What Makes This Country Special?
FINRA Prolongs Deadline For Companies To Report Crypto Activity
“As securities regulators continue to provide guidance to members regarding the unique regulatory challenges presented by digital assets – e.g., Joint Statement on Broker-Dealer Custody of Digital Asset Securities – FINRA believes it is important to keep the lines of communication with members open on this important topic.”FINRA suggests that the activities that should be reported include buying, selling and transacting digital assets, ICOs, and derivatives but also investing in digital assets and opening funds. Among others, the list also offers the advisory services or funds and offering custody services, mining cryptocurrencies and accepting the crypto as a mean of payment. Any other use of blockchain technology should be reported as well as the authority suggests. At the start of this month, FINRA and the Securities and Exchange Commission (SEC) issued a joint statement where they say there are a number of questions to be noted before they can approve crypto companies’ applications to become broker-dealers. One of the factor, why FINRA prolongs the date, is that the brokers need to prove that they engage with crypto in order to provide better regulation. According to a statement which we have in our altcoin news we can read that:
“The ability of a broker-dealer to comply with aspects of the Customer Protection Rule is greatly facilitated by established laws and practices regarding the loss or theft of a security, that may not be available or effective in the case of certain digital assets.’’
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