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Token Taxonomy Act makes comeback; proposes removal of cryptocurrencies from umbrella of securities

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Token Taxonomy Act makes comeback; proposes the removal of cryptocurrencies from the umbrella of securities
Source: Pixabay

Cryptocurrencies being characterized as securities may soon fade away, courtesy of the reintroduction of the Token Taxonomy Act in the United States House of Representatives. Proponents of the decentralized currency realm have long contested decentralized currencies being labeled with the securities tag.

Proposed by Representative Warren Davidson (R), the Token Taxonomy Act will amend the infamous Securities Act of 1933 and the Securities Act of 1934, thereby removing cryptocurrencies from under the umbrella of securities. The act was also attested by Darren Soto (D), Josh Gottheimer (D), Ted Budd (R), and Presidential candidate, Tulsi Gabbard (D), who is a known crypto-investor.

The importance of the act was spelled out by Davidson, who stated that sans the act, the United States would cede the digital economy to emerging markets of the east. He stated,

“Without it, the U.S. is surrendering its innovative origins and ownership of the digital economy to Europe and Asia. Passing this legislation, Congress would send a powerful message to innovators and investors around the world that the U.S. is the best destination for blockchain technology.”

In December 2018, during the close of the legislative season, the Token Taxonomy Act was first introduced. However, it didn’t make much headway then. The recent version will clarify the powers of regulatory bodies like the Commodity Futures Trading Commission [CFTC] and the Federal Trade Commission [FTC].

However, all is not bright. The Act also looks to supersede pre-existing state laws regarding the domestic cryptocurrency industry within its borders. In legal terms, the Token Taxonomy Act will add to the National Securities Markets Improvement Act, which will increase the federal government’s power over the decentralized currency field.

This will be an unprecedented withdrawal of state power in light of the center’s overreach, many legal and crypto-analysts commented. States would cede digital assets regulation to the Federal government, in what will be a blow to not just decentralized currency, but also decentralized governance.

Several analysts have pointed out the semantic confusion that will exist when legislation for a “digital token,” or a “virtual currency” will take place. This will lead to a legal vacuum, leading to the emergence of more problems.

On the bright side, the act will allow the token seller to undercut regulatory supervision, if they can justifiably prove that they weren’t selling securities.





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Bitcoin

Bitcoin’s 2017 bull run was fueled by FOMO & hype; present run more fundamentally driven, claims report

Biraajmaan Tamuly

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Source: Pixabay

Here we go again. Another bull run. Another “hype session” among investors as Bitcoin rises again. The cryptocurrency market is well known for its incredible shift in market sentiment, especially on the back of the world’s largest cryptocurrency surging again.

Bitcoin not only reached its 16-month high today, but it also recorded a growth of 15 percent over the week. This has contributed to several analysts and industry insiders speculating how high Bitcoin will go, with Anthony Pompliano claiming that the digital currency will soon cross its all-time-high valuation of nearly $20,000 and reach a massive $100,000 by 2021.

These predictions have definitely contributed to the coin’s growth as while the present surge is similar to the 2017 rally, it’s not driven by FOMO alone.

Source: SFOX volatility report

A recent comparison drawn out by the SFOX Volatility report compared the preset rally with the bull run of 2017.

The report suggested that the rally of 2017 was largely driven by ‘FOMO.’ When Bitcoin started climbing the valuation ladder, word got out and many investors discovered virtual assets for the first time. The rally of 2017 was mainly fostered through hype and speculation, since there were no major readings or past data to back the rising price.

Source: SFOX volatility report

The present run, while similar, is different in some aspects, one of them being that Bitcoin has a larger user base now than in 2017. While FOMO remains a major factor in driving the price up, the current surge is also backed by developments in the ecosystem, such as the entry of retail investors and huge financial/non-financial institutions joining the crypto-bandwagon.

Facebook’s crypto project, Libra, and Bitmain’s pursuit for a U.S IPO have validated Bitcoin and the rest of the cryptocurrency market, a luxury not available to the market of 2017. The present rally thus, is more mature than the 2017 rally as the present market’s fundamentals are more data-driven.

There remain some stark similarities in the trends however. For instance, in 2017, the push from $9000 to $11000 took place in a period of 7 days. The current push from around $8800 to $11000 came to be in 8 days.





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