US Token Taxonomy Act may fizzle, asserts crypto attorney

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Two U.S. politicians, Ohio Representative Warren Davidson and Florida Representative Darren Soto, introduced a House bill last month designed to better define cryptocurrencies. The Token Taxonomy Act (TTA) seeks to improve crypto oversight and explicitly removes crypto from being defined as securities. Now, that bill may have to wait and might not even make it to the floor during the current legislative session, according to notable crypto attorney, Jake Chervinsky.

In a Twitter post from this past Saturday, Chervinsky asserted, “I don’t know if there’s any validity to the rumor that the Token Taxonomy Act will be reintroduced in Congress on February 14. But even if true, there will be months or years of Committee hearings and revisions before the bill could even possibly see a vote. Don’t hold your breath.”

Davidson, a long-time crypto supporter, drafted the bill with Soto in hopes of staving off the continued departure of FinTech entities to overseas locations due to the lack of regulations. They also hope that better oversight will allow for further adoption of blockchain and crypto technologies by businesses. 

The two lawmakers believe that a “light touch” is needed for the crypto space. Davidson has repeatedly argued that the country needs “a light-touch regulatory framework that provides certainty for the ICO [initial coin offering] market.” 

About the TTA, Davidson said in a statement last month, “In the early days of the Internet, Congress passed legislation that provided certainty and resisted the temptation to over-regulate the market. Our intent is to achieve a similar win for America’s economy and for American leadership in this innovative space.

“This bill provides the certainty American markets need to compete with Singapore, Switzerland, and others who are aggressively growing their blockchain economies.”

The TTA would, in part, introduce an amendment to the Securities Act of 1933 that would simply the fundraising process through digital tokens. Given the complexity of securities, the return to business-as-almost-normal on Capitol Hill following the government shutdown and the lack of clarity on how crypto is currently defined, Chervinsky is certain that the bill will not be a priority among lawmakers.