Cryptocurrencies now represent well over a trillion dollars in wealth.
NFTs have created an entire new market, and smart contracts over the blockchain can allow for exciting new ways to transact within the economy.
At the same time, our government is lagging well behind the industry and the rest of the world. While some states such as Wyoming have taken the reins and have created a friendly environment for companies operating in this space, they’re the exception. For the most part, states are providing no guidance, or guidance that highlights a fundamental misunderstanding of the underlying technologies and markets.
Federal agencies are failing to provide any guidance, even when companies approach them to figure out how to legally allow transactions to occur. And the permissive state-based regulations are creating problems when companies operating within those states try to work with these federal agencies so that they’re not breaking any securities or banking laws.
Blockchain technology isn’t going anywhere, and the breadth of where it can be applied is only starting to be realized. We need to create a national framework that allows this innovation to thrive so that we can benefit from the wealth and applications that it will generate. At the same time, we can ensure that there are consumer protections in place and clear legal guidelines.
Problems to be Solved:
- There’s no standardized regulatory framework, resulting in states with different regulations.
- Worse, federal agencies are providing conflicting, unclear, and incomplete guidance when presented with questions and problems by companies operating in this space.
- Blockchain technology is moving into new areas - smart contracts, collectibles, etc… - faster than the government can keep up.
- Current state-based regulatory conditions are resulting in problems with access to the Fed and related banks.
“Investment in cryptocurrencies and digital assets has far outpaced our regulatory frameworks in the US. We should let investors, companies, and individuals know what the landscape and treatment will be moving forward to support innovation and development.”
Solutions:
- Recognize the difference between securitized tokens and utility tokens, regulating each separately and appropriately.
- Promote a federal regulatory framework that allows for innovation and stability in the wider digital asset space.
- Provide for consumer protections, especially with respect to investing and purchasing digital assets.
- Hire blockchain experts or consultants to inform the government’s dealings with companies operating in this space.
- Create clear guidance on the tax implications of buying, selling, and trading digital assets.
- Recognize a series LLC.
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