Bitcoin btc
$ usd

Reality Check: Token Act Will Take Years in Congress

2 mins
Updated by Dani Polo
Join our Trading Community on Telegram
The news of a bill in Congress to provide clarity on the SEC token definition has been widely hailed by crypto-philes. However, current events suggest that any actual legislation will take months — or even years — for ratification.
The bill, introduced just before the current shutdown by two representatives — Warren Davidson (R-Ohio) and Darren Soto (D-Florida) — is titled the “Token Taxonomy Act.” The central goal of the bill is to redefine a “security” by amending the Securities Act of 1933, as well as the Securities Exchange Act of 1934. The amendment would create a new category to define digital currencies — thereby shifting enforcement to the Federal Trade Commission (FTC). federal trade commission

Long time, no action

The bill’s presentation was met with much fanfare in the cryptocurrency community but was almost immediately shelved due to the holiday break in Congress and the subsequent shutdown. However, with the government shutdown on a temporary pause this week, hopes for passage have been renewed. These hopes, however, will likely not be fulfilled. Very simply, Congress moves slowly — particularly with items of major import that would change long-standing precedents. Even with a Feb 14 reintroduction of the bill for consideration, such a massive policy shift would require bipartisan support, extensive debate, and committee consideration. Each of these likely will cause extensive delays.

Something’s gotta give

Though the actual changes to the laws surrounding cryptocurrencies are still far in the future, the very introduction of a bill on the floor of Congress is good news. Devotees have argued that the archaic rules in the original securities definitions are unhelpful, at best, in the digital age. The advent of digital financial instruments, like Bitcoin (BTC), has brought to light the work that must be done to bring governmental definitions up to date. However, with the influx of new users into the crypto economy, government ire has been raised. The Securities and Exchange Commission (SEC) is not wont to make major policy changes — and events like the recent VanEck-SolidX Bitcoin ETF proposal withdrawal makes this clear. Further, the potential for fraud in the initial coin offering (ICO) world has also raised a number of red flags in both the financial and legal sectors. With consumers at risk — and legacy financial instruments and definitions failing to meet the needs of the day — a standoff can’t be too long coming. Think the Token Taxonomy Bill will see the light of day this congressional term? Or is it just a crypto pipe dream? Let us know in the comments below! 


All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

With a background in science and writing, Jon's cryptophile days started in 2011 when he first heard about Bitcoin. Since then he's been learning, investing, and writing about...