Warren Davidson, a Republican politician from Ohio, is continuing with his quest to get cryptocurrency recognised by law, announcing a plan to create regulation for initial coin offerings.
A different way
He made the announcement at a four-day blockchain event in Cleveland, the main purpose of which was to discuss using blockchain in government systems, according to local news source Cleveland.com. Said Davidson: “What this does for entrepreneurs is it gives people an ability to raise capital a different way.”
The report does not reveal details of the proposed legislation, but reportedly it will be introduced “soon”.
Preempting a heavy-handed approach
ICOs are when companies sell their digital tokens to the public, with the aim of getting them circulating and making money. Often very large amounts of money are made, and not always (or even usually) for a useful product.
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And even in cases where a token-issuing business is legitimate, the US Securities and Exchange Commission awaits to ensure that the business has received approval to sell securities, which is how the SEC defines most digital tokens. SEC Chairman Jay Clayton recently expressed that existing securities laws are adequate to accommodate digital assets, and that the agency has no intention of changing them.
Businesses have tried to work around this, for example by calling their tokens currency or ‘utility tokens’; the SEC has not often bought this and has shut down many of these projects. Notable exceptions include when it classified Ethereum tokens as coins in June, and more recently when a federal court defied the regulator in its action against a company called Blockvest.
Davidson is a strong supporter of the new industry. In September he chaired a government hearing where the nation’s blockchain businesses expressed their desire for legality. He told them: “Your input is critical to helping us preempt a heavy-handed regulatory approach that could stall innovation and kill the U.S. ICO market.”
Nor is he the only one – recent elections in the US gave two Bitcoin-friendly Democratic politicians seats in government too.