“Let Crypto Build”, Says Congressman Tom Emmer


By Christos Makridis

The latest “cryptographic winter” following the collapse of Earth / Moon and the withdrawal of other stable currencies has revived attacks on the web3 community based on insider trading e financial instability. The virtual attacks have led to federal regulators, including Federal Reserve Vice President Lael Brainard call for the development of central bank digital currencies. But these deficiencies in cryptography should also be combined with the deficiency of fiat currencies, recognizing that there is a lot of illicit money laundering and insider trading with dollar too.

Despite recent attacks on cryptography, the community is growing. Gary Vaynerchuk convened a diverse and energetic group of people, including celebrities such as Eva Longoria and Snoop Dogg, at the inaugural VeeCon 2022, held in Minneapolis, Minnesota, May 19-22.

Also in attendance was Congressman Tom Emmer (R-MN), who discussed the challenges and pitfalls of cryptography that may lie ahead due to the spectrum of federal regulation and intervention. Politicians are often reactive: they respond to a problem, or at least the perception of a problem, with artificial solutions.

Referring to the recent deterioration of Earth / Moon, “I am concerned that we will rush to resolve an issue that too many people in Congress do not understand,” said Emmer. In particular, policymakers have been debating how to define a high-quality liquid asset, but the risk is to over-regulate it and stifle competition and create new forms of fragility. “I am concerned that our government should define this as just US dollars,” Emmer said.

The solution, according to Emmer, is no longer regulation, but a congressional taxonomy that sets definitions and creates a framework for building on the web3. There is no debate that federal politics has a role to play: markets require a framework or “rules of the game” to function properly. But, “it has to be a light-touch regulatory environment,” Emmer said. “We can’t try to put crypto in a framework that is almost 100 years old. Many regulators are trying to do that by defining values ​​according to the three characteristics of the”Howey test“established in 1933 as a result of the Supreme Court case.”

According to Howey’s proof, a stock has three defining characteristics: (1) there is an investment of money, (2) there is a joint venture, and (3) there is a reasonable expectation of profit from the efforts of others. Under a strict interpretation, homes would be considered a security for consumers: in addition to the obvious investment of money, they are usually a joint venture (ie a family that raises resources) and the value of housing is appreciated in part due to national factors or local. economic and demographic trends.

Consider the appearance of non-fungible (NFT) tokens. Many NFTs appreciate its value, in part because of the strong community that forms around it. But if such a strict – and outdated – interpretation of titles were applied, millions of lives would change overnight: home ownership could plummet and the rapidly growing emerging developer economy through NFT sales would always be discouraged. . starting creative projects.

Worse, the builders would flee the United States and build elsewhere. “They will move the activities offshore because they have to do it,” Emmer said. “We [Congress] We need to be advocates and define what fits the definition of currency, merchandise, security … if we do, we can give specific cowboys to regulators, “said Emmer. Lacking a framework, federal regulators run the risk of an ad hoc approach to governing crypto and web3, disrupting the lives of builders and society in the process.

Ultimately, the debate over the future of web regulation3 is a matter of personal choice and responsibility. “I rely more on myself to make my own mistakes, fail, decipher it, and climb back to the top of the hill, instead of my government saying, ‘You have to be careful that someone takes advantage of you, so’ “We will never give him a chance to fail or succeed,” said Congressman Emmer.

Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY) introduced a bill outlining new comprehensive regulation for cryptocurrencies, including a tax exemption on transactions below $ 200 and a clearer definition of cryptocurrencies versus cryptocurrencies. The bill seeks to “give clarity to both industry and regulators, while also maintaining the flexibility to account for the continuing evolution of the digital asset market.”

The proposed legislation, while an important step towards greater regulatory clarity, can also open the door to those looking for opportunities to expand control over the web3.



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