Interest in the crypto economy continues to grow in Congress. On September 25, 2018, Representative Warren Davidson (R-OH) hosted a roundtable, “Legislating Certainty for Cryptocurrencies,” with more than 50 financial institutions and crypto start-ups invited to attend. Additionally, the House Financial Services Committee has scheduled a hearing on financial innovation on September 28, 2018, entitled Examining Opportunities for Financial Markets in the Digital Era.
Last week, Representative Tom Emmer (R-MN), co-chair of the Congressional Blockchain Caucus, announced his intention to introduce three separate pieces of legislation regarding distributed ledger technology. While the future of these measures in Congress is uncertain, they represent a welcome development in lawmakers’ understanding of digital assets and related issues.
First, a Resolution Supporting Digital Currencies and Blockchain Technology expresses support for the industry and its development in the United States. The resolution states, among other things, that (1) the United States should prioritize accelerating the development of blockchain technology to support transparency, security and authentication; (2) the United States government should create an environment that enables the American private sector to lead on blockchain innovation; (3) and federal agencies should work toward a coordinated framework to support digital currencies and blockchain technology.
The Blockchain Regulatory Certainty Act provides that blockchain developers and blockchain service providers who, in the regular course of business do not have control over users’ digital currency, do not need to register with the federal government as a money transmitter, money services business or financial institution. Perhaps attempting to address the issue of state regulation of blockchain businesses, the bill would also preempt “any other State or Federal legal designation requiring licensing or registration as a condition to acting as a blockchain developer or provider of a blockchain service, unless the developer or provider has, in the regular course of business, control over digital currency to which a user is entitled.” But a subsequent provision provides, somewhat confusingly, that “[n]othing in this section shall be construed to prevent any State from enforcing any State law that is consistent with this section. No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section.”
Finally, the Safe Harbor for Taxpayers with Forked Assets Act attempts to provide a safe harbor for taxpayers with forked digital assets until the Treasury Department or Congress provides further guidance on the federal income tax treatment of receiving forked convertible virtual currency, including rules for calculating and allocating the basis of forked convertible virtual currency, rules for calculating the fair market value of forked convertible virtual currency, and rules for determining the holding period of forked convertible virtual currency. The bill defines “forked convertible virtual currency” as any convertible virtual currency to which the taxpayer becomes entitled by reason of a hard fork. It in turn defines “convertible virtual currency” as any digital representation of value that functions as a medium or exchange, unit of account, or store of value; does not have legal tender status; and has an ascertainable equivalent value in legal tender or is used as a substitute for legal tender. Finally, the bill defines “hard fork” by reference to any material change in the shared digital ledger that is used to verify consensus transactions in such currency if the change results in the maintenance of independent shared digital ledgers in respect of such currency.
- Partner
Scott brings in-depth knowledge of SEC policies, procedures and enforcement philosophy to each representation. Scott regularly advises clients across a broad sector of the economy facing sensitive reporting, compliance and ...
The Hunton Andrews Kurth Blockchain Blog features opinions and legal analysis as we follow the development and use of distributed ledger technology known as the blockchain.
Search
Recent Posts
Categories
Tags
- 2019 Leaders’ Declaration
- 2020 National Strategy for Combating Terrorist and Other Illicit Financing (the 2020 Strategy)
- Advancing Innovation to Assist Law Enforcement Act
- Airdrops
- AML compliance program
- AML/CFT
- anonymity-enhanced cryptocurrencies
- Anti-Money Laundering
- Anti-Money Laundering Act of 2020 (AMLA)
- Anti-Money Laundering Compliance
- Antifraud
- Aon and Marsh
- Arizona
- Arkansas
- Artificial Intelligence
- Artificial Intelligence (AI)
- Australia
- Australian Competition and Consumer Commission (ACCC)
- Australian Securities and Investments Commission (ASIC)
- Automated Clearing House (ACH)
- Bank of England
- Bank Secrecy Act
- Bank Secrecy Act (BSA)
- Bank Term Fund Program
- Bermuda
- Biden Administration
- BIS
- Bitcoin
- Bitcoin Cash
- Bitfinex
- BitLicense
- Blockchain
- Blockchain Incubators
- Blockchain Legislation
- Blockchain Regulatory Certainty Act
- Blockchain Technology Act
- Brazil
- Breach of Contract
- Broker-Dealer
- Broker-Dealers
- BSA
- BSA Enforcement
- BTFP
- Bureau of Economic Analysis
- California
- Canada
- Captive Insurance
- CCPA
- Celebrity Endorsers
- Central Bank
- Central Bank Digital Currency (CBDC)
- Centre for Information Policy Leadership (CIPL)
- CFTC
- Chapter 15
- China
- Christopher Giancarlo
- Civil Enforcement
- Class Actions
- Clearweb
- Colorado
- Commissioner
- Commodity Exchange Act
- Commodity Exchange Act (CEA)
- Commodity Futures Trading Commission
- Complaint Bulletin
- Compliance
- Compliance Note
- Congress
- Connecticut
- Consent
- Consumer Financial Protection Bureau (CFPB)
- Consumer Protection
- Convertible Virtual Currency
- Corporate Compliance
- Corporate Governance
- Corporate Transparency Act (CTA)
- Council of Institutional Investors
- Council of the European Union
- Countering the Financing of Terrorism (CFT)
- Cross-Border Data Transfer
- crypto arbitrage trading accounts
- Crypto Assets
- crypto bank
- crypto custody
- Crypto Hackers
- Crypto Mining
- Crypto-commodity
- Crypto-currency
- Cryptoassets
- Cryptocurrency
- Cryptopia Limited
- Cryptosweep
- CVCs
- cybercrime
- Cybersecurity
- Dalia Blass
- DAO Report
- Darknet
- darknet marketplaces
- Data Privacy
- Data Protection Authority
- Davos
- decentralized finance (DeFi)
- DeFi
- Del. Michael San Nicolas
- Delaware
- Department of Business and Industry
- Department of Justice
- Department of Treasury
- DFS
- Digital Asset
- Digital Asset Securities
- Digital Assets
- Digital Commodities Consumer Protection Act of 2022
- digital currency
- digital currency ATM operators
- digital currency exchangers
- digital currency flows
- Digital Financial Assets Law (the Act)
- Digital Token Act
- digital token sales
- Digital Tokens
- Distributed Ledger
- Documentary Stamp Tax (DST)
- Dodd-Frank
- DOJ
- Economic Sanctions
- EDPB
- Eleventh Circuit
- Endorsement Guides
- Enforcement Action
- ePrivacy
- Ether
- Ether Classic
- EU General Data Protection Regulation (GDPR)
- EU Regulation
- European Central Bank
- European Commission
- Exchange Act
- Exchange Traded Fund
- FDIC
- Federal Election Commission
- Federal Reserve
- Federal Reserve Board
- Federal Trade Commission
- FedNow
- fiat currency MSBs
- Fiat-Backed
- Fight Illicit Networks and Detect Trafficking Act
- Figure Lending LLC
- Final Guidance
- Financial Action Task Force (FATF)
- Financial Crimes Enforcement Network (FinCEN)
- Financial Privacy
- Financial Stability Board
- Financial Stability Oversight Council
- Financial Stability Report
- Financial Technology Protection Act
- FinCEN
- FINRA
- FinTech
- Florida
- Foreign Corrupt Practices Act (FCPA)
- Foreign Extortion Prevention Act (FEPA)
- Form BE-12
- fractional interests
- FTC
- Gemini Dollar
- Gemini Trust Company
- Global Consortium for Digital Currency Governance
- Group of Seven
- Group of Twenty (G20) Finance Ministers
- H.R. 5635
- Hard Fork
- Heath Tarbert
- Her Majesty’s Revenue & Customs (HMRC)
- HM Revenue & Customs (HMRC)
- home equity lines of credit (HELOCs)
- Homeland Security Assessment of Terrorists’ Use of Virtual Currencies Act
- House of Representatives
- House of Representatives’ Financial Services Committee
- Howey
- Howey test
- IEO
- iFinex Inc.
- Illinois
- India
- Information Sheet 225
- Initial Chain Offering
- initial exchange offerings (IEOs)
- Insurance
- Intellectual Property
- International
- International Monetary Fund (IMF)
- Investor Protection
- IRS
- Jefferies Funding LLC
- Kenneth Blanco
- KYC/AML requirements
- Lael Brainard
- Large Platform Utility
- Legislation
- Legislature
- Liechtenstein Parliament
- liquidity
- Litecoin
- Litigation
- Louisiana
- Ltd.
- Malicious Cyber Activity
- Malicious Cyber Actor
- managed stablecoin
- Martin Act
- Maryland
- Metaverse
- model rule
- Monetary Policy
- Money Laundering
- Money Service Business
- money services businesses (MSBs)
- Mortgages
- Multi-Level Marketing Program (MLM)
- Mutual Fund
- Nakamoto
- narcotics
- NASAA
- Nebraska
- network maturity
- Nevada
- New Jersey
- New York
- New York Attorney General
- New York Department of Financial Services (DFS)
- New Zealand
- NFT (Non-Fungible Token)
- NFTs
- Non-fungible tokens
- North Dakota
- North Korea
- NY Department of Financial Services
- OFAC
- Office of Investor Education and Advocacy
- Office of the Comptroller of the Currency (OCC)
- Ohio
- Oklahoma
- Patent
- Paxos Standard
- Paxos Trust Company
- peer-to-peer exchangers
- Penalty
- Pennsylvania
- Personal Data
- Personal Information
- President’s Working Group (PWG)
- Privacy
- privacy coins
- Provenance.io
- Proxy Voting
- Public Blockchain
- rapid settlement
- real estate
- Regulation and Enforcement
- Rep. Sylvia Garcia
- Rescission
- Retail
- Ripple
- Ripple Labs
- Rule 233-1
- Russia
- Sanctions
- Sanctions Compliance Program (SHP)
- SAR lookback review
- SD8 coins
- SDN List
- SEC
- SEC crypto-securities
- SEC registration
- Securities
- Securities Act
- Securities Act of 1933
- Securities and Exchange Commission
- Securities and Exchange Commission (SEC)
- Securities Exchange Commission
- security tokens
- Self-disclosure
- Senate Committee on Banking Housing and Urban Affairs
- Shareholder
- Shareholders
- SIFI
- Signature Bank
- Silicon Valley Bank
- South Carolina
- South Dakota
- Spencer Dinwiddie
- stablecoins
- Stablecoins are Securities Act of 2019
- State-Sponsored Malicious Cyber Groups
- Suspicious Activity Report
- suspicious activity reporting (SARs)
- SVB
- SWIFT messaging system
- Swiss Financial Market Supervisory Authority (FINMA)
- Switzerland
- synthetic hegemonic currency
- Taxation
- Templum
- Tennessee
- Terrorist Financing
- Tether Limited
- Texas
- Texas Business Organizations Code (TBOC)
- Texas Senate Bill 1859
- Texas Senate Bill 1971
- The World Bank
- three-year safe harbor
- Token and TT Service Provider Act
- token developers
- token transfer limits
- tokenization
- tokenized assets
- Trademark
- Travel Rule
- Trump Administration
- TT Identifier
- TT System
- TVTG
- U.S. Virtual Currency Market and Regulatory Competitiveness Act of 2019
- UCC Article 12
- UK Tax Rules
- unhosted wallets
- Uniform Commercial Code
- United Kingdom (UK)
- United Specialty Insurance Company
- United States Bankruptcy Code
- United States Patent and Trademark Office
- US central bank digital currency (US CBDC)
- US Department of the Treasury
- US Department of the Treasury’s Office of Foreign Assets Control (OFAC)
- US dollar
- US Treasury
- USTR
- Utah
- Vermont
- Virginia
- Virtual Asset Service Providers
- Virtual currencies
- Virtual Currency
- Virtual Currency Consumer Protection Act of 2019
- Virtual Currency Exchange
- virtual currency license
- Virtual Currency Tax Fairness Act of 2020
- Virtual Markets Integrity Initiative
- Washington
- Weapons of Mass Destruction Proliferators Sanctions Regulations
- World Economic Forum
- Wyoming
- XRP
Authors
- Jimmy Bui
- Mayme Donohue
- Nicholas Drews
- Andrew Feiner
- Jason Feingertz
- Hannah Flint
- Kevin E. Gaunt
- Armin Ghiam
- Carleton Goss
- Gregory G. Hesse
- Scott H. Kimpel
- Marysia Laskowski
- Michael S. Levine
- Phyllis H. Marcus
- Lorelie S. Masters
- Patrick M. McDermott
- Uriel A. Mendieta
- Alex D. Pappas
- Daryl B. Robertson
- Natalia San Juan
- Caitlin A. Scipioni