Clear definitions of crypto-assets and a lack of understanding of the relevant federal laws are two main concerns about the proposed Crypto-Currency Act of 2020 making its way through the US Congress. There are suggestions that, should the proposal go ahead, its definitions of crypto-assets must be amended for greater clarity.
Robert Kim, a legal analyst, stated in his article published on Bloomberg Law website, “The draft bill’s superficially neat categories of crypto-assets and superficially neat division of regulatory authority over them create new problems regarding boundaries, however, making them likely to sow further confusion rather than establish clarity.”
The Crypto-Currency Act of 2020 defines crypto-commodity as “economic goods or services that—(A) have full or substantial fungibility; (B) the markets treat with no regard as to who produced the goods or services; and (C) rest on a blockchain or decentralized cryptographic ledger.”
Kim points out that such a definition of crypto-commodity is very expansive, saying it encompasses Bitcoin and all other cryptocurrencies.
The Crypto-Currency Act of 2020 would assign each category of crypto-assets to a sole regulator. One of the issues that should be taken into account concerns the assigning of the Financial Crimes Enforcement Network (FinCEN) as the regulator of crypto-currency.
The legal analyst points out that FinCEN does not regulate currencies, as its regulatory authority applies to financial institutions and other entities or individuals that handle transactions — not to the currency or other assets transacted.
“I will say that any attempt to draft a federal cryptocurrency law requires clear and thorough understanding of the policies and laws that it would revise before it could become a serious legislative proposal,” Kim concludes.
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