Congress wants clarity
In a positive turn of events, the SEC was provided with a formal request for clarity on ICOs. This letter was drafted and signed by 15 members of Congress.
Throughout the course of 2018 the SEC has had their sights on scam artists and unauthorized security broker/dealers within the blockchain industry. Much to the dismay of investors and politicians alike, the SEC has continually acted in a reactive manner. To date, they have failed to provide the public with clear concise guidelines on how current laws apply to this new asset class.
To further add to the confusion of the market, we have seen SEC representatives publically state that projects that began as securities do not necessarily stay this way. Most notably, William Hinman of the SEC stated that although Ethereum began as a security, it no longer fell under that designation. Months later in response to Hinman’s comment, Jay Clayton of the SEC stated that, “…staff statements are nonbinding and create no enforceable legal rights or obligations of the Commission or other parties.”
So here we have one high ranking member stating one thing regarding crypto, while another is saying those statements don’t mean anything. This is all occurring while no one has been provided with clear and concise guidelines. If one thing is blatantly obvious, it is that despite the SECs statements that they are ‘acting in the interest of investors’, to date they have done nothing but cause confusion and harm to a burgeoning industry.
Congress has seen this, and recognized the obvious division within the ranks of the SEC. Whether referring to William Hinman, or Hester Peirce stating that the SEC is overstepping their authority, it is apparent that not everyone is on the same page.
This misalignment in the ranks needs to be resolved, as many believe the United States will be left behind in the innovation of this game-changing industry. In addressing the SEC, it was stated, “We believe that the SEC could do more to clarify its position. Additionally, we are concerned about the use of enforcement actions alone to clarify policy and believe that formal guidance may be an appropriate approach to clearing up legal uncertainties which are causing the environment for the development of innovative technologies un the United States to be unnecessarily fraught.”
IRS not forgotten
This is not the first time that members of congress have sought clarity regarding digital assets. Nine days prior to providing the SEC with their request, 5 members of congress did the same with the IRS.
Congress raised concerns with the lack of clarity for tax payers in this letter. They believe that guidelines are not sufficient, and taxpayers should not learn of their mistakes through punishment. Not everyone is a criminal, scam artist, and looking to cheat the IRS. These people are entitled to be provided with crystal clear guidelines on actions to follow. They should not learn of their mistakes through punishment, if they did not have sufficient means to avoid these mistakes in the first place.
In their letter, Congress makes their stance clear that not enough has been done to provide clarity. They stated, “While the Committee appreciates the IRS’s need to undertake enforcement actions to ensure that taxpayers generally meet their tax obligations, in this case, we are concerned that the IRS is seeking to enforce guidance that does not adequately advise taxpayers of their tax obligations when using virtual currencies.”