Regulatory legislation for cryptocurrencies and initial coin offerings (ICOs) may be getting closer – and Ohio is leading the way. Cleveland.com reported that US Rep. Warren Davidson (R) of Ohio announced legislation at the recent Blockchain Solutions Conference in Cleveland – an event that is part of the city’s Blockland rebranding initiative – that “would prevent [crypto] from being classified as securities but would also allow the federal government to regulate initial coin offerings more effectively.”
Cryptocurrency regulation became a hot-button issue in the wake of 2017’s crypto boom, as the government was forced to confront the potential issues raised by digital currency’s burgeoning popularity. Clarity has been hard to come by – regulations around the world have been piecemeal, though some governing bodies have taken clear stances (without being able to pass clear legislation).
Individual stances from organizations have not added up to a unified, multi-body view. The US Securities and Exchange Commission (SEC) has never wavered in their belief that cryptocurrencies are securities and need to be regulated as such; meanwhile, the Commodity Futures Trading Commission (CFTC) classifies virtual currencies as commodities; the Financial Crimes Enforcement Network treats crypto as money; and the Internal Revenue Service (IRS) views crypto as property, where “profits from selling them are subject to capital gains tax,” says Cointelegraph. States around the US can all classify tokens in different ways, further muddying the regulatory waters.
Davidson has a track record of support for virtual currencies and blockchain – he has been an outspoken proponent of “light touch” regulation of ICOs that would clarify the space’s regulatory framework without creating impediments to growth. His bipartisan legislation “would seek to create an ‘asset class’ for tokens, which would prevent them from being classified as securities, but would also allow the federal government to regulate initial coin offerings more effectively,” reports Cleveland.com.
The moves come at a time that Cleveland is trying to “rebrand [itself] as a national tech hub,” says NPR. The Blockland initiative is designed “to establish Cleveland as a significantly relevant technology center by being a leader in blockchain solutions, with the goal of massively growing employment that benefits the entire Cleveland community.”
The effort faces significant roadblocks. Cleveland is a manufacturing town, and the planned transition to one of America’s tech capitals is a major shift. As such, a primary focus of the Blockland team is educating the public about blockchain and cryptocurrency. The Blockchain Solutions Conference is a key component of that process, billed as “one of the first blockchain education conferences to provide experiential learning through hands-on coding and real-world problem solving with a focus on solutions for business and government applications.”
Ohio – crypto hub? It seems unlikely. But with impending regulatory legislation from Warren Davidson and the Blockland initiative picking up steam in Cleveland, the Midwestern state is positioning itself as an unlikely ally for digital currencies.
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