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Don't Call It a Comeback: With Two Bills, U.S. Lawmakers AIM to Give New Life to Non-Security Tokens


Less than one week after the U.S. Securities and Exchange Commission’s (the “SEC”) Staff released a landmark “Statement on “Framework for ‘Investment Contract’ Analysis of Digital Assets,” announcing FinHub’s publication of an analytical token framework (the “Token Framework”) and the Division of Corporation Finance’s first digital asset sale-focused no-action letter (the “TKJ No-Action Letter”) (collectively, the “Token Guidance”), U.S. federal legislators introduced two ambitious bills expressly aimed to support the U.S. blockchain industry:  the Token Taxonomy Act of 2019  (H.R. 2144) (the “TTA”) and the Digital Taxonomy Act (H.R. 2154) (the “DTA” and, together with the TTA, the "Bills").


Michelle Gitlitz, a partner and Co-Head of the Blockchain Group at Blank Rome LLP, calls the Bills “an important development in the law for digital assets.”

“Whether you agree or disagree with the [TTA’s substance]," she asserts, “our legislators solicited feedback from the industry on the pain points facing the digital asset economy and have tried to address those pain points.”

Gitlitz is referring to a September 25, 2018 “crypto roundtable” called “Legislating Certainty for Cryptocurrencies,” hosted in Washington, D.C. by Congressman Davidson.  There, she, and more than 80 other representatives from major Wall Street firms and blockchain companies, discussed cryptocurrency regulations.  Market concerns reportedly included requests for exemptions for non-security token sales, frustration with certain state laws, including New York’s BitLicense, and a desire for legal clarity.

"Don't Call It a Comeback: With Two Bills, U.S. Lawmakers AIM to Give New Life to Non-Security Tokens," by Joshua Ashley Klayman was published in Forbes on April 13, 2019.