Crypto Firms to Congress: We Need Clarity on Blockchain Token Rules

Some 80 representatives from the cryptocurrency and traditional finance industries trekked to Washington, D.C. on Tuesday with a singular message for U.S. lawmakers: we need regulatory clarity on cryptocurrencies and initial coin offerings.

Over the course of the morning and early afternoon, stakeholders outlined the difficulties they face when launching projects and products in the U.S. The culprit behind their woes: uncertainty as to when cryptocurrencies are treated as securities and how startups should approach compliance more broadly.

"Your input is critical to helping us preempt a heavy-handed regulatory approach that could stall innovation and kill the U.S. ICO market," Davidson told attendees during his prepared remarks.

"With a thoughtful, bipartisan approach that protects consumers, advances free market solutions and defines safe-harbors for the early stage innovators, Congress can send a powerful message around the world that the U.S. is the best destination for ICO markets."

At the heart of these debates is a desire to advance cryptocurrency adoption within the U.S. However, as CoinList general counsel Georgia Quinn noted on Tuesday, there is a dearth of clarity guiding these developers.

The issues range from how cryptocurrency gains are taxed to whether someone crypto startups qualify as money transmitters.

Davidson joins a growing group of U.S. lawmakers who believe that some form of accommodative legislation is necessary to spur development around cryptocurrencies.

Just last week, Representative Tom Emmer, one of the guests at the forum and the newly-named co-chair of the Congressional Blockchain Caucus, proposed a trio of bills aimed at encouraging innovation without unfairly penalizing those who seek to launch token sales or otherwise transact with cryptocurrencies.

While one of Emmer's bills focuses on the taxation of cryptocurrency investment gains, Representative Kevin Brady and the House of Representatives' Ways and Means Committee sent a letter to the Internal Revenue Service last week requesting that the nation's tax agency publish comprehensive guidance for U.S. residents - something the IRS hasn't done to date.

CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.