Thursday, June 20, 2019

The US to Break Switzerland’s Charm on Crypto Startups with New Bill

A new bill has just been created by US congressman, Warren Davidson, to prevent crypto startups from running to friendlier regions.

Breaking Switzerland’s Allure

Switzerland is fast becoming the Mecca for crypto startups and fast cementing its claim as the world’s blockchain hub. While a lot of governments legal architecture have been from skeptical to indecisive, Switzerland has been abundantly clear and open in its disposition towards the concept of blockchain and virtual assets.

While a few startups have been caught unaware after unfavorable rulings classifying their product as securities, Switzerland was highly praised even by industry veterans after it announced that some ICOs are not securities. United States indecisive stance towards the asset class of prospective ICOs is unsettling a number of entrepreneurs hoping to make their mark in the crypto space.

Warren Davidson discussed an encounter he had with a crypto entrepreneur in 2018 after becoming a congressman, one of the series of events that drove the decision behind his new drafted bill. Contemplating where to locate his new crypto startup, the entrepreneur told the congressman and friend:

“Look, it’s nothing personal. We just don’t trust that you guys are gonna get this done right. So we’re feeling kind of Swiss.”

This could only mean one thing, Davidson friend thought Switzerland has a friendlier climate for cryptocurrency than the United States.

The United States has displayed its willingness to be at the forefront of things more times than the world can count; however, on the subject of cryptocurrency and blockchain, they just might be losing the race before the race had even begun. Davidson’s drafted bill is meant to stop the migration and to make sure the United States maintains its attraction towards new cryptocurrency innovations.

Pass the Bill

Warren Davidson has long been an enthusiast of virtual currency and distributed ledger technology having been in the technology space before he became a congressman in 2016. Having been an entrepreneur with a number of manufacturing companies at his behest, Davidson noted the legal uncertainties that were constantly cropping up during ICOs, and his tenure is an opportunity to address the problem.  With the help of fellow congressman, Darren Soto, Davidson released the new Token Taxonomy Act in December last year.

The new bill which discusses the exemption of ICOs as securities define its conditions. For example, some of the conditions are that: the token’s supply can’t be controlled by a single person or group of people; once finalized, transactions can’t be altered by a single person or group of people; and the token “is not a representation of a financial interest in a company, including an ownership or debt interest or revenue share.”

Caitlin Long, a blockchain advocate, and one who recently help passed a crypto ruling in Wyoming has warned that while the new development is a significant and welcome one, it just might take years before it is fully implemented.

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