Legislators are considering a bill, the Cryptocurrency Act of 2020, which would establish a governing framework for digital assets. It’s also an attempt to clarify the confusing and contradictory patchwork of local, state, and federal laws that currently regulate the crypto market.
Some people think it’s a positive sign that mainstream entities are embracing digital assets. Other players, however, view all crypto-regulatory moves as bad ones.
Cryptocurrency Act of 2020: Defining Crypto Products and Services
The bill defines three digital currency categories:
- Crypto-commodities: Fungible economic goods or services, which sit on a decentralized blockchain ledger and whose value is untethered to the product’s creator.
- Crypto-securities: All blockchain-based derivatives, equity, and debt instruments, excluding compliant operations registered with the Department of Treasury as a money services business.
- Cryptocurrencies: Representations of United States currency or “synthetic derivatives” rooted in a cryptographic blockchain ledger. Or, in simpler terms: digital tokens.
Cryptocurrency Act of 2020: Establishes the “Federal Crypto Regulator” Triumvirate
Under the proposed law, three federal agencies would share crypto-regulatory governance under the newly created umbrella of either the “Federal Crypto Regulator” or “Federal Digital Asset Regulator.”
- The Securities and Exchange Commission would oversee crypto-securities.
- The Financial Crimes Enforcement Network (FinCEN, a department within the U.S. Treasury) would develop a framework for tracking cryptocurrency transactions.
- The Commodity Futures Trading Commission (CFTC) would oversee crypto-commodity matters.
Additionally, under the law, all three agencies would develop and publish licensing and certification requirements for their respective niche areas and coordinate with each other to ensure regulatory cohesion.
Connect with a Cryptocurrency Lawyer
The Gordon Law Group works with blockchain businesses and companies launching niche digital tokens. Our team handles everything from transaction legalities to litigation representation. Get in touch today. Learn why our clients rate us 10 out of 10 on respected lawyer review website AVVO.com.