Republican Warren Davidson Will Introduce Bill For Regulating ICOs



Last Updated: December 6, 2018 at 5:46 AM EST
Republican Warren Davidson Will Introduce Bill For Regulating ICOs

Warren Davidson, a Republican Congressman from Ohio, announced earlier this week that ICO regulations are not far off. He declared that he would introduce a bill to regulate cryptocurrency and Initial Coin Offerings in the near future. The issue of Initial Coin Offerings has been a difficult one to tackle by regulators in the USA.

Warren Davidson ICO Regulation

Warren Davidson, a Republican congressman has announced that he will spearhead a bill destined to regulate ICOs.  An Initial Coin Offering (ICO) is a new alternative form of crowdfunding where investors don’t buy shares or stake. They buy tokens, a so to speak “currency” that allows them to perform certain functions in a platform. The function of those tokens is wildly different. That is why these instruments are difficult to tackle from a regulative standpoint because they are complex and don’t fall into a static category.

Republican Warren Davidson Will Introduce Bill For Regulating ICOs

But this has scared off investors and innovators from the USA, and as it is right now, the ICO industry is a barren land in that country. That’s why Warren stated that this form of crowdfunding must be regulated to give entrepreneurs a chance to build upon this new kind of investment.

He announced this at the Blockland Solutions conference in Cleveland, a conference that mostly has to do with how blockchain and cryptocurrency related innovations could be used by the government. However, there is a significant amount of confusion about the subject of ICOs, and the SEC (Securities and Exchange Commission).

The SEC Approach

The SEC chairman Jay Clayton thinks that cryptocurrency instruments must fall into the existing law categories. The initiative presented by Warren Davidson to the Congress would be in direct opposition with this opinion. The SEC has jumped to be the defacto ICO regulator in the USA, sanctioning and enforcing fines to some ICOs that have scammed their investors.

Republican Warren Davidson Will Introduce Bill For Regulating ICOs

According to the SEC, most of this tokens that result from the realization of these Coin Offerings represent securities. They pass the Howey test, a financial questionnaire that reveals if an asset is a security. Despite this, there has been some thought if they are really in their jurisdiction to rule over these instruments.

However, the legislation announced by Warren Davidson is not yet public. According to his words, it should be introduced in the near future. It will classify tokens as assets to prevent them to fall under the supposed jurisdiction of the SEC.