legislation

A Senator from NY and a Senator from WY have recently presented Congress with a draft proposal for a crypto regulatory scheme which is a mixed bag from this Firm’s perspective. Wyoming is possibly the best state for crypto ventures and banking, and for good reason, hence one of the senators (Lummis) has been and remains definitively pro-crypto. Nonetheless the bill could have been much better. Firstly, crypto-assets would, for the most part, be under the regulatory imprimatur of the Commodities and Futures Trade Commission; as mentioned in other posts, this is a positive development as crypto-assets are, for the part closest in their nature to commodities and should reasonably be under the CFTC’s control. The SEC has done a decent job of bringing enforcement actions against some of the largest fraudulent players, rug pulls, and pyramid schemes, to date, numbering about 80; though this is just a tiny part of the total fraudulent activity in this market. The SEC is not the proper agency to regulate crypto and forcefully shove some crypto assets under the ‘securities’ definition, when such an interpretation is unwarranted. CFTC may be a smaller and lesser funded agency, but congress can certainly provide additional funding or mandate that its expansion into crypto regulation be funded by various crypto industry actors. It appears the SEC will share some regulatory control with the CFTC over crypto-assets when it is clear that a particular digital asset is acting as a security; this is totally reasonable, as digital assets such as crypto token, coins, and NFTs can act as commodities and securities, though the top 10-20 crypto-assets are almost certainly more akin to commodities. Crypto transactions below $200 will be exempt from tax reporting/payment obligations. This is a start; however, this amount is far too low. $1k would be […]