US Congress has proposed a regulatory holiday for crypto start-ups

US Congress has proposed a regulatory holiday for crypto start-ups

The US needs to enable tokenseals without the risk of encountering SEC enforcement action. The proposals are contained in the "Transparency for Digital Tokens Act of 2021", drafted by House of Representatives member Patrick McHenry.

McHenry is a member of the Financial Services Committee of the lower house of the US Congress. His initiative rhymes with a similar proposal by SEC Commissioner Hester "Cryptomama" Pearce.

Like Pearce, the congressman proposed introducing criteria under which a startup must register, and clarifying under what conditions the products it develops would not be subject to the definition of "investment contracts".

In particular, the bill would require companies to disclose the transactions and platforms that have added a token to the listing. Another provision requires a startup to warn investors of the potential loss of funds and high risk if its tokens are purchased.

"Unfortunately, the current regulatory framework threatens to push the technology and the jobs it has created overseas. My bill, which builds on the work of [...] Hester Pearce, will help provide the necessary regulatory certainty for digital asset projects when they are launched," says an accompanying commentary to the bill.

According to lobby group Chamber of Digital Commerce, the bill "has the potential to form a much-needed clear path for those creating innovation".

Chamber statement on Clarity for Digital Tokens Act of 2021 introduced by Ranking Member Patrick McHenry (@PatrickMcHenry).

McHenry's initiative was also supported by The Blockchain Association.

We commend @PatrickMcHenry's efforts to outline a clear safe harbor process for innovators to work *with* regulators to build the future of finance and protect consumers.

Recall that in September, McHenry, along with colleague Glenn Thompson, called on SEC and CFTC officials to create a joint working group on digital assets with market participants to develop a compromise between regulation and innovation.


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