US lawmakers look to clarify digital assets in the context of securities law

A group of Congressional representatives has proposed legislation to provide clearer definitions for digital assets and technologies, especially as they relate to securities laws.

House Reps Tom Emmer (R-MN), Darren Soto (FD-L) and Ro Khanna (D-CA) collectively introduced the Securities Clarity Act on Thursday. All three are members of Congress's Blockchain Caucus, a coalition focused on the crypto and blockchain industry.

The bill's authors hope to provide clarity for entrepreneurs looking to distribute their assets to the public after meeting securities registration requirements by clarifying that an investment contract asset — like a token — is separate and distinct from the companion securities offering.

"This new defined term would refer to any asset sold as part of an investment contract that would not be considered a “security” but for its sale as part of an investment contract," the lawmakers explained in a statement.

It would directly amend the Securities Investor Protection Acts of 1933, 1934 and 1970, as well as the Investor Advisers Act of 1940 and the Investment Company Act of 1940 to reflect this understanding of the definition of security.

The lawmakers are touting it as a "technology neutral" approach in the bill, meaning that though it is specifically intended to mitigate a problem found in dealings with digital assets, it could apply to both tangible and digital assets.

The full text of the bill can be found below: by MichaelPatrickMcSweeney on Scribd