New Effort to Exempt Crypto Currency from Certain SEC, Tax and Other Regulatory Burdens

A new bill, the Token Taxonomy Act was introduced to congress to amend the Securities Act of 1933 and the Securities Exchange Act of 1934 to exclude digital tokens from the definition of a security, to direct the Securities and Exchange Commission to enact certain regulatory changes regarding digital units secured through public key cryptography, to adjust taxation of virtual currencies held in individual retirement accounts, to create a tax exemption for exchanges of one virtual currency for another, to create a de minimis exemption from taxation for gains realized from the sale or exchange of virtual currency for other than cash, and for other purposes. If passed this will be a huge boost for cryptocurrency. The bill is pretty technical. Some of the highlights are as follows. For purposes of the act, the term ‘digital token’ means a digital unit: (A) that is created— (i) in response to the verification or collection of proposed transactions; (ii) pursuant to…

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