Token Taxonomy Act, H.R. 7356 Promises To Keep SEC Away from ICOs

The scrutiny over Initial Coin Offerings (ICOs) from regulatory bodies has been a major concern for new crypto projects. This year has seen a significant decrease in the number of ICOs conducted as well as the number of fundings behind these projects.

After a long tussle between the crypto investors and SEC, the members of the US House Representatives have finally jumped in to save the ICOs from the sanctions. These lawmakers have finally decided to classify the Coin Offerings separate from securities, and outside the clutches of Securities and Exchange Commission (SEC).

The Token Taxonomy ACT, H.R. 7356 was filled by Ohio Rep. Warren Davidson, along with Florida Rep. Darren Soto. the bill is aimed at allowing crypto businesses to flourish without being burdened by unnecessary sanctions put in by SEC.

The Aim Behind Token Taxonomy Act

When the crypto businesses were making an entrance in US markets, SEC put on some heavy regulations in the form of Bitlicense, forcing many upcoming projects to shift their base. The recent bill aims to put coin offering in cryptos outside the reach of SEC. The provision is an amendment to the 1933 Securities act which would exclude ‘digital tokens’ from the definition of security.

At the moment only Bitcoin and Ethereum are not considered as security, and apart from that, every other cryptocurrency come under the security quota. If the bill gets passed, it would exempt the digital tokens sale, development and distribution from the clutches of SEC. The congressman also believes that containing the SEC would help the regulators to work alongside developers of the digital token. The partnership would help both the parties to create an ecosystem mutually beneficial for everyone.

Final Thoughts

SEC has always been a part of the problem rather than solutions. It’s the hardline approach towards the cryptocurrencies that made many upcoming and established projects to leave the States in 2015. Finally, the members of the US Senate has realized the potential of the technology and how fruitful it can become in coming years, prompting to introduce the token Taxonomy act. Hopefully, the initiative is not too little too late, to lure back the crypto investors and upcoming startups