Illustration: Rebecca Zisser / Axios
Reps. Warren Davidson (R-Ohio) and Darren Soto (D-Fla.) have introduced a new House bill that would clarify laws governing initial coin offerings and change how cryptocurrencies are taxed.
Why it matters: Cryptocurrencies like Bitcoin function partly as currency and partly as investment, creating all sorts of regulatory uncertainties that the industry has long hoped to get clarified. But the U.S. Securities and Exchange Commission has been slow to lay out rules, instead communicating its interpretation of securities law via enforcement actions.
Among the changes that the bill includes:
- Revise the definition of "security" in the Securities Act of 1933 and the Securities Exchange Act of 1934 to exclude digital tokens that are "not a representation of a financial interest in a company, including an ownership or debt interest or revenue share."
- A tax exemption for using cryptocurrencies to purchase goods and services for under $600. This way, if a person uses Bitcoin, for example, to purchase a cup of coffee and the price of the cryptocurrency has gone up since they purchased it, they won't have to pay capital gains tax on the transaction.
In September, Davidson hosted a roundtable about initial coin offerings with a number of representatives from industry players.