By: Cameron Bowen, 28 August 2018

America Discussed “Light Touch” ICO Regulation

The US Congress is no stranger to the topics of cryptocurrency and ICOs. In general, though, the American government has opted for a gentle regulatory approach. Fearing that strict regulations (a la China) might stifle technological innovations that would greatly benefit the United States in the future, ICOs have been allowed to operate as they see fit (with the exception of certain obvious frauds).

On September 25, US Representative Warren Davidson (Republican from Ohio) will meet with 32 cryptocurrency organizations in Washington DC. They will discuss future regulatory approaches for the ICO industry. The organizations include non-profits and businesses. Nasdaq, Intercontinental Exchange, Andreessen Horowitz, CME Group, Circle, Kraken, Union Square Ventures, Ripple, and Coin Center will be in attendance. The invite list includes some two dozen others.

On the menu for discussion is the question of whether ICOs should be considered to be securities. Securities are regulated by the SEC (Securities and Exchange Commission), and ICOs thus regulated would have many new restrictions upon the way they are traded and taxed. Today’s SEC does not consider most crypto assets to be securities but “utility tokens”, thus not including them in contemporary SEC oversight.

Decentralization may be another way for a cryptocurrency to avoid being considered a security, just as Ethereum’s Ether token is not considered a security. Crypto assets could survive and even thrive as securities, but the US Government seems to be looking for ways to make them an asset class all their own. NASDAQ has conducted closed door meetings on Capital Hill addressing this same issue.

No one can say how the issue will be resolved, but it is encouraging for crypto enthusiasts to see lawmakers conversing with real industry representatives. Hopefully the United States can set a global standard by legitimizing Cryptocurrency as a tradable asset class, without pigeonholing the still young industry disruptor.

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