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Washington, D.C. – On May 18, Majority Whip Tom Emmer (MN-06) and Representative Darren Soto (FL-09) announced the introduction of their bipartisan Securities Clarity Act. The bill will provide clarity to the regulatory classification of digital assets, providing market certainty for innovators and clear jurisdictional boundaries for regulators.  

Currently, existing securities law does not distinguish between an asset and the securities contract it may or may not be part of. Many cryptocurrencies may initially be issued as part of a securities contract, but, once the project is fully developed and decentralized, the token could fall under a different classification, such as a commodity.  Without a distinction between the asset and the securities contract, token projects that must raise capital to fund development in the early stages will not be able to move out of the securities framework once the project is decentralized, preventing these tokens from being used for their utility, which will only harm token holders.  The Securities Clarity Act offers a key distinction that will enable crypto projects to reach their full potential in a compliant way, enabling the United States to compete globally in this next iteration of the internet. This legislation is crucial to ensuring that domestic innovation thrives, and that the United States remains globally competitive.  Emmer said, “So long as we lack a clear definition under the law for what is a commodity and what is a security, American innovation will suffer.”   “Entrepreneurs need to be able to accurately calculate risk to create new investment opportunities and grow our economy. The Securities Clarity Act will help provide these answers and allow American investors to fully participate in this exciting technology without sacrificing consumer protections. We need the United States to lead in the next iteration of the internet,” Emmer concluded.   Rep. Soto said, “Blockchain technology contributes to our nation’s economy by allowing innovation to grow. Congress is working to protect those who invest in this technology with the Securities Clarity Act. This bill will add critical definition and jurisdiction to create certainty for a strong digital asset market in the United States. This is an important step in maximizing the potential of virtual currencies for the U.S. economy, all while protecting customers and the financial well-being of investors."

“This is the smartest approach we have seen to provide clarity about how securities law applies to digital assets. We applaud Rep. Emmer for his continued leadership on policy affecting cryptocurrency,” said Jerry Brito, Executive Director of Coin Center. 

"As interest in digital assets grows, industry needs clear rules of the road so that companies can offer products that consumers want while maintaining consumer protections. Blockchain Association would like to thank Representatives Emmer and Soto for their continued work to do just that. The Securities Clarity Act would go a long way towards providing regulatory clarity for the securities treatment of digital assets and we are proud to support its reintroduction," said Kristin Smith, CEO of Blockchain Association.

"Establishing a predictable legal environment for tokens is one of the most pressing issues facing the digital asset marketplace today. The Securities Clarity Act is crucial legislation that provides much needed certainty for investors, consumers, and businesses by reaffirming the difference between an investment contract and digital assets sold or transferred under the terms of an investment contract," said Perianne Boring, Founder and CEO of the Chamber of Digital Commerce. “The Chamber of Digital Commerce commends Congressman Emmer for introducing the Securities Clarity Act, which asserts U.S. leadership in the global digital asset marketplace and spurs competition and innovation for the blockchain technology industry.”

Sheila Warren, CEO of the Crypto Council for Innovation, said, “The lack of clarity on the definition of a digital asset security continues to be a major challenge for companies operating in the United States. We commend Rep. Tom Emmer and Rep Darren Soto for their commitment to American innovation with the reintroduction of this important bipartisan legislation, which makes clear the distinction between an investment contract and the underlying asset or token.”  Specifically, the legislation specifies that any asset sold as the object of an investment contract, now defined as an “investment contract asset,” is distinct from the securities offering it was a part of. This definition is technology-neutral and would apply to all assets sold or offered that would only be considered a “security” because of their inclusion in an investment contract.  Emmer first introduced the Securities Clarity Act in 2020.  This legislation has support from Coin Center, Blockchain Association, Chamber of Digital Commerce, and the Crypto Council for Innovation.  

The legislation is available in full here.

Original source can be found here