In the United States, conditions must be created for conducting token sales without the risk of enforcement actions by the SEC. Such proposals are contained in the Clarity for Digital Tokens Act of 2021, drafted by Representative Patrick McHenry.
McHenry sits on the House of Representatives’ Committee on Financial Services. His initiative rhymes with a similar proposal by SEC Commissioner Hester “Crypto Mom” Peirce.
Like Peirce, the congressman proposed establishing criteria under which a startup would have to register, and clarifying the conditions under which the products it develops would not be deemed “investment contracts”.
In particular, the bill would oblige companies to disclose information about transactions and platforms that have added a token to listings. Another provision requires startups to warn investors about potential loss of funds and the high level of risk if they buy its tokens.
“Unfortunately, the current regulatory framework threatens to push technology and the jobs it creates overseas. My bill, built on the work of Hester Peirce, will help provide the regulatory clarity needed for digital asset projects at their launch.”, — in the accompanying commentary to the bill.
According to the lobbying group Chamber of Digital Commerce, the bill “has the potential to form the much-needed clear path for those who create innovations”.
Chamber statement on Clarity for Digital Tokens Act of 2021 introduced by Ranking Member Patrick McHenry (@PatrickMcHenry).
Full bill text can be found here: https://t.co/Tr4HmnXggG pic.twitter.com/Cp4qkRmsmy
— Chamber of Digital Commerce (@DigitalChamber) October 5, 2021
The initiative was also backed 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. https://t.co/vsBQWB4PBh
— Blockchain Association (@BlockchainAssn) October 5, 2021
In September, McHenry, together with colleague Glenn Thompson urged representatives of the SEC and CFTC to create a joint working group on digital assets with market participants to forge a compromise between regulation and innovation.
Clarity for Digital Tokens Act of 2021 by ForkLog on Scribd
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