Republican congressman Tom Emmer has introduced a new bill to assist blockchain developers in avoiding unreasonable financial reporting requirements related to cryptocurrency. The lawmakers are hoping to clarify the contradictory language in the Biden Administration’s infrastructure bill, which might label many blockchain participants as digital asset “brokers.”
Clearing the Air on Crypto Reporting
Emmer tweeted on Thursday, announcing the introduction of the “Blockchain Regulatory Certainty Act,” which establishes a “safe harbor” for developers and blockchain service providers who do not have direct access to users’ assets. This Act specifies that such parties should not be considered money transmitters or financial institutions and should not be subjected to registration requirements unless they are engaged in crypto-asset security.
“If you don’t custody consumer funds, you are *not* a money transmitter,” argued Emmer. “The Blockchain Regulatory Certainty Act provides this necessary certainty for miners, validators, wallet software providers, and the entire blockchain ecosystem.”
The infrastructure bill introduced by Biden in November 2021 required information reporting by digital asset “brokers,” enabling critics to argue that the definition was broad enough to cover miners, stakers, and developers. Supporters of Emmer’s legislation believe that it will clarify the requirements sufficiently to keep the cryptocurrency sector from shifting offshore.
“For too long, federal regulators and policymakers of jammed the blockchain ecosystem into statutory definitions that just do not make sense,” stated Emmer.
The Regulatory Battle for Crypto
The determination of which cryptocurrencies fall under federal securities laws is a tough issue for crypto in the United States.
The Securities and Exchange Commission (SEC) has long argued that practically all cryptocurrencies are securities, with Bitcoin being the only exception. In contrast, the Commodities and Futures Trading Commission (CFTC) contends that there are far more crypto commodities, including Ether and Tether (USDT).
The agency is also targeting the exchange for its staking services, as it did with rival exchange Kraken last month.
“The reality is that there is no clear rulebook from the SEC on crypto today, and efforts to engage with the SEC are met with silence or enforcement actions,” stated Coinbase’s Chief Legal Officer on Wednesday.
Coinbase is also facing a potential lawsuit by the agency for listing certain security tokens. The company contests that these tokens do not classify as securities.