FOR IMMEDIATE RELEASE
WASHINGTON, D.C. – October 5, 2018 – 10XTS, a leader in blockchain technology and asset tokenization, recently attended the Congressional Roundtable “Legislating Certainty for Cryptocurrency” on Capitol Hill, where CEO Michael Hiles spoke on the complexities of capital formation and the challenges facing legislators in drafting effective regulatory frameworks for emerging technologies like blockchain. Organized by Congressman Warren Davidson (R-OH), the event brought together policymakers, industry leaders, and legal experts to discuss critical issues surrounding cryptocurrency regulation.
Following his presentation at the roundtable, Hiles and 10XTS were invited by Congressman Davidson’s office to submit a position paper for consideration as part of the proposed Token Taxonomy Act. The forthcoming bill aims to introduce a clearer regulatory framework for digital assets and tokenized securities, tackling longstanding issues of ambiguity that currently impede blockchain innovation within the United States.
Michael Hiles, CEO of 10XTS, Addresses Legislative and Capital Formation Challenges
During his remarks at the roundtable, Hiles highlighted fundamental issues affecting early-stage capital formation and the risks posed by poorly defined regulations. “One of the major challenges is that legislative language often lacks clarity and coherence, especially for rapidly evolving technologies like blockchain,” Hiles said. “Before we attempt to regulate, we need a unified taxonomy that defines key terms and concepts in U.S. Code, creating a strong foundation for any future legislation.”
Hiles has been vocal about his concerns that legislation must be rooted in language that is clearly understood by technologists, attorneys, and policymakers alike. His focus on developing a clear taxonomy aligns with 10XTS’s mission to create compliant solutions for digital asset management that work within legal frameworks. By establishing precise definitions, 10XTS believes legislators can better avoid inconsistencies and create a balanced approach that promotes innovation while safeguarding investors.
The Position Paper: Establishing a Token Taxonomy for Sound Legislation
The 10XTS position paper emphasizes the need to create a standardized Token Taxonomy to bring clarity to key terms like “token,” “digital asset,” “security,” and “commodity” within the context of blockchain and cryptocurrency. The paper advocates for defining these terms in the U.S. Code to lay the groundwork for legislation that addresses both the technical and legal facets of blockchain.
The paper underscores several critical points for consideration:
Taxonomy Before Legislation: A clear and formalized taxonomy is essential before enacting legislation. Without agreed-upon definitions, there is a risk of creating laws that are misinterpreted or misapplied, creating uncertainty for businesses and investors.
Capital Formation and Innovation: Regulatory clarity can help unlock capital formation for early-stage blockchain companies. Hiles expressed concern that a lack of clear regulatory direction has driven innovative companies offshore, putting the U.S. at risk of losing its competitive edge in blockchain technology.
Flexibility to Address Technological Evolution: Blockchain technology is rapidly evolving, and the regulatory framework must be adaptable. The position paper encourages Congress to consider a framework that allows for flexibility and technological growth without stifling innovation through overly prescriptive laws.
Balancing Investor Protection and Market Growth: While protecting investors from fraud is paramount, 10XTS advocates for a regulatory approach that does not hinder legitimate companies from raising capital. By defining clear categories for tokens, the paper argues that Congress can help create a transparent environment that attracts responsible investors.
The Token Taxonomy Act is expected to be introduced during this legislative session, with the goal of providing the necessary regulatory clarity for digital asset markets to flourish within a secure, compliant framework. If passed, the bill would be introduced to the House Financial Services Committee for further review.
“It’s crucial that Congress adopts a regulatory approach that is not only enforceable but also allows blockchain and cryptocurrency innovation to thrive in the U.S.,” said Congressman Davidson. “Hearing from industry leaders like 10XTS helps us draft legislation that reflects both the complexities and potential of this technology.”
10XTS’s participation in this dialogue underscores the company’s ongoing commitment to advancing blockchain technology in compliance with regulatory standards. “We’re excited to contribute to the policy-making process,” said Hiles. “Establishing a clear taxonomy is the first step toward a more transparent and supportive environment for blockchain in the U.S. We look forward to continuing our work with Congressman Davidson and his team to help shape legislation that aligns with the needs of the industry.”
About 10XTS
10XTS is a blockchain technology company focused on delivering secure, compliant, and efficient solutions for asset tokenization and data management. Its flagship platform, XDEX, provides a robust, regulatory-compliant ecosystem for the management, issuance, and trading of digital assets. Based in Cincinnati, Ohio, 10XTS is dedicated to advancing blockchain innovation through responsible compliance and active engagement with industry and regulatory bodies.
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