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The ABA Business Law Section released a major report on digital assets and crypto-currency regulation on Wednesday.
The 353-page document titled “Digital and Digitized Assets: Federal and State Jurisdictional Issues” provides definitions relevant to digital currency, domestic regulatory issues, and what international bodies and other countries are doing when confronted by the new technology.
“There are lots of different points of view and issues regarding how cryptocurrency markets and transactions are regulated, and these are products that current statutes didn’t envision when they were enacted,” says Charley Mills, chair of the Innovative Digitized Products and Processes Subcommittee (IDPPS) Jurisdiction Working Group and partner at Steptoe & Johnson in Washington D.C. “So, we thought it would be useful to do a survey to see where the law is.”
Without a comprehensive regulatory scheme, various federal agencies and states are reacting to different issues as they bubble up. Within its pages, the report includes a 50-state survey of relevant laws and regulations. The paper also provides a framework to improve clarity and consistency among federal agencies enforcing rules regarding digital assets.
A digital asset, when created, can take the form of a security investment, while over time, the same asset begins to look more like a derivative, making enforcement hard. This has led to the Securities and Exchange Commission and the Commodity Futures Trading Commission to wind up with overlapping enforcement and some inconsistencies on this subject, explains Kathryn Trkla, chair of IDPPS and partner at Foley & Lardner in Chicago.
Beyond regulators, Trkla hopes that the document will also be useful to practitioners looking to get grounded in the issues surrounding cryptocurrency.
The inspiration to write the paper and creating the IDPPS came after the Chairman of the CFTC, J. Christopher Giancarlo, spoke to the Derivatives and Future Law committee a year ago. Trkla says the talk encouraged them to be more proactive thought leaders on this emerging issue.
The report had 34 authors who volunteered their time. At the moment, there is no intention to update this document, according to Mills.