More than a dozen U.S. lawmakers have signed a letter asking the Security and Exchange Commission (SEC) chairman Jay Clayton to provide a clear picture of how the agency views the digital asset class. The U.S. lawmakers are concerned about the guideline which SEC uses to determine whether cryptocurrency assets are securities under federal law. The letter came days after an ICO summit of Wall Street and Crypto industry representatives in Washington. The ICO summit was hosted by Rep. Warren Davidson, one of the co-signer of the letter. In the summit, the representatives from cryptocurrency exchanges, blockchain start-ups, and venture capital funds pleaded for more regulatory guidelines about the emerging crypto industry.
The letter was signed by Ted Budd, Tom Emmer, Warren Davidson, Darren Soto, and 11 other Congress members. In the letter, all the representatives have requested Jay Clayton to clarify how the SEC is approaching token sales. In the letter, the group has stated that “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.”
The U.S. lawmakers are concerned that the Security and Exchange Commission is not able to issue clear and definitive guidelines on what makes an Initial Coin Offering (ICO) tokens security. Because of the confusion on ICO treatment, several start-ups are abandoning the United States and moving in the countries where rules and regulations are clearer.
Congressmen believe that the SEC must tell the investors and crypto enthusiasts, how the agency plans to regulate the crypto industry. They also said that it is important that all policymakers work towards developing clear guidelines about the digital assets which are considered as security and those that are not. In the letter, the U.S. policymakers asked three questions to Jay Clayton regarding the legal status of cryptocurrency assets and ICO tokens.
The letter states that:
“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.”
As of now, SEC is treating the majority of digital assets like securities, using the same laws which govern stocks. The SEC has clarified that ether and bitcoin are commodities which are regulated by Commodity Futures Trading Commission (CFTC). But SEC uses Howey Test for other digital assets which are created by ICOs. Clayton already made it clear that he does not intend to update standard for digital assets because as an independent agency, SEC can give the clarity on existing laws but cannot change them without the act of Congress. Last week Congress representative Tom Emmer said that he is planning to introduce three crypto and blockchain friendly bills.