Washington, D.C. – Today, Congressman Tom Emmer reintroduced his bipartisan Securities Clarity Act with Congressman Darren Soto. The legislation will bring regulatory clarity to the digital assets ecosystem, providing market certainty for American innovators and investors and clear jurisdictional boundaries for regulators.

“Until we have a clear definition of what is a commodity and what is a security, American innovation will continue to suffer. Entrepreneurs need clarity to calculate risk accurately, create new investment opportunities and grow our economy. Our legislation will help provide these answers and allow American investors to fully participate in digital asset technology without sacrificing consumer protections,” Congressman Tom Emmer said.

"Blockchain technology helps boost our nation’s economy by allowing innovation to grow. With the Securities Clarity Act, Congress is working to protect those who invest in this technology. This bill will add critical definition and jurisdiction to create certainty for a strong digital asset market in the United States—an important step in maximizing the potential of virtual currencies for the U.S. economy while protecting customers and the financial well-being of investors," Congressman Darren Soto said. 

“This is the smartest approach we have seen to provide clarity about how securities law applies to digital assets. We applaud Rep. Emmer for his continued leadership on policy affecting cryptocurrency,” said Peter Van Valkenburgh, Executive Director of Coin Center.

"The digital asset industry needs clear rules of the road so that companies can offer products that consumers want while maintaining consumer protections. Blockchain Association thanks Representatives Emmer and Soto for their continued work to do just that. The Securities Clarity Act aims to provide regulatory clarity for the securities treatment of digital assets and we are proud to support its reintroduction," said Kristin Smith, CEO of the Blockchain Association.

“Establishing a clear legal framework for digital tokens is one of the most urgent challenges in the digital asset marketplace,” said Cody Carbone, President of the Chamber of Digital Commerce. “The Securities Clarity Act is one of the most important steps Congress can take to provide certainty for investors, consumers, and businesses to reaffirm the distinction between investment contracts and the digital assets themselves. The Digital Chamber applauds Whip Emmer for his leadership in introducing this bill, which reinforces U.S. leadership in the global digital asset economy and promotes competition and innovation in blockchain technology.”

“We appreciate and thank Majority Whip Tom Emmer for his continued leadership and steadfast support of American innovation with the reintroduction of this important legislation, which would provide much needed clarity regarding the definition of a digital asset security," said Ji Hun Kim, President & Acting CEO of the Crypto Council for Innovation.

Background:
Currently, existing securities laws do not distinguish between an asset and the securities contract it may or may not be a part of. This presents regulatory challenges as many cryptocurrencies may initially be issued as part of a securities contract, but, once the project is fully developed and decentralized, the token could fall under a different classification, such as a commodity.

Without a distinction between the asset and the securities contract, projects that must raise capital to fund their development will not be able to move out of the securities framework once the project becomes decentralized, preventing these tokens from being used for their utility, and harming American investors. The Securities Clarity Act creates a distinction between an asset and the securities contract it may or may not be a part of and will enable digital asset projects to reach their full potential in a regulatory-compliant way, enabling the United States to lead in the digital assets space.

Specifically, the Securities Clarity Act specifies that any asset sold as the object of an investment contract, now defined as an “investment contract asset,” is distinct from the securities offering it was originally a part of. This definition is technology-neutral and applies to all assets sold or offered that would only be considered a “security” because of their inclusion in an investment contract.

The Securities Clarity Act was included in the text of the Financial Innovation and Technology for the 21st Century (FIT21) Act in the 118th Congress which passed the House of Representatives in May of 2024.

The legislation is endorsed by the Coin Center, the Blockchain Association, the Chamber of Digital Commerce, and the Crypto Council for Innovation.

You can read the bill in its entirety here. 

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