FOR IMMEDIATE RELEASE
WASHINGTON, D.C. – September 28, 2018 – On Tuesday, September 25, 10XTS CEO Michael Hiles participated in the “Legislating Certainty for Cryptocurrencies” Congressional Roundtable held on Capitol Hill. Organized by Congressman Warren Davidson (R-OH) and attended by bipartisan members of the Congressional Blockchain Caucus – including Congressman Ted Budd (R-NC), Congressman Tom Emmer (R-MN), and Congressman Darren Soto (D-FL) – the event provided a critical platform for industry leaders to share insights and address regulatory concerns ahead of the introduction of new cryptocurrency legislation this fall.
The roundtable, a high-profile assembly of leaders from blockchain, finance, and tech industries, was designed to gather essential industry input on pressing topics affecting blockchain and cryptocurrency markets. Discussions were divided into three main tracks: Token Taxonomy, Compliance & Consumer Protection, and Creating a Flourishing ICO Market in the U.S. The event saw representation from major players in the financial and blockchain sectors, including NASDAQ, DTCC, Coinbase, Kraken Exchange, Ripple, a16z, Union Square Ventures, Fidelity, State Street Bank, and Circle.
Congressman Davidson and his colleagues emphasized the importance of defining clear regulatory frameworks to support a healthy, competitive environment for digital assets in the United States, safeguarding investor protection while fostering innovation. With new legislation pending, Davidson’s initiative underscores the growing need for a balanced regulatory landscape that encourages innovation while protecting investors and consumers.
Guiding the Regulatory Framework for Blockchain and ICOs in the U.S.
The roundtable discussions focused on a series of vital regulatory questions intended to guide the direction of forthcoming legislation. Topics addressed included:
- Token Taxonomy: Determining appropriate classifications for digital assets and distinguishing tokens from securities and commodities.
- Compliance and Consumer Protection: Examining best practices for protecting consumers from fraud and addressing compliance needs for exchanges, brokerages, and other platforms.
- Creating a Flourishing Market: Exploring how to establish the U.S. as a global leader in crypto markets, supporting early-stage companies while ensuring compliance.
Congressman Davidson and the Congressional Blockchain Caucus sought input on critical questions, such as: How should blockchain tokens be designated – as securities, commodities, or other digital assets? What regulatory definitions or tests can differentiate tokens from other asset classes? What models from other global regulatory frameworks can guide U.S. lawmakers in building a vibrant digital asset market? How can consumer protections be bolstered without stifling innovation?
Michael Hiles’ Contributions on Blockchain Transaction Context, Capital Formation, and Regulatory Balance
Michael Hiles provided essential input on several key issues affecting the blockchain and cryptocurrency space:
Blockchain Transaction Context: Hiles proposed that defining the context of a blockchain transaction, rather than focusing solely on the token, is vital. He emphasized that a token is often an artifact as the result of a transaction rather than an isolated asset itself, and its classification should be evaluated accordingly.
Application Tokens and Computing Value: Addressing the regulatory treatment of application tokens, Hiles discussed how certain tokens represent stored computing value rather than securities. Drawing on historical models like service bureaus and cloud computing, Hiles advocated for clear guidelines that would allow companies to pre-sell application tokens without conflicting with securities laws.
Early-Stage Capital Formation Challenges: Hiles underscored that many ICO-related issues stem from challenges in early-stage capital formation in the United States. He noted that the surge in token sales highlights the lack of accessible early-stage funding options, and without addressing these underlying issues, the U.S. risks losing its global competitive edge as talent and innovation move offshore.
Regulatory Approach vs. Risk Tolerance: Hiles highlighted a dichotomy in regulatory approaches, pointing out that while blockchain investments face heavy scrutiny, consumers are able to buy lottery tickets without identification or proof of age. He called for a regulatory framework that balances investor protection with the realities of risk tolerance and consumer choice.
Insights from Industry Heavyweights
The event included insights from leaders across the blockchain and finance sectors, with participation from prominent institutions such as NASDAQ, DTCC, Coinbase, Kraken Exchange, Ripple, Fidelity, and State Street Bank. These industry stakeholders echoed concerns about regulatory uncertainty and emphasized the importance of a framework that enables blockchain to flourish without unnecessary restrictions.
Moving Toward a Clear Regulatory Framework
With the input gathered from the event, Congressman Davidson and the Congressional Blockchain Caucus plan to introduce new legislation that will provide a clearer path for blockchain innovation in the U.S. Davidson stressed the importance of bipartisan support to pass meaningful legislation that allows the U.S. to remain competitive globally in blockchain and fintech. The upcoming bill seeks to address the ambiguities surrounding ICOs and token classifications, providing clarity for businesses and investors alike.
“We need a regulatory approach that enables blockchain and cryptocurrency to thrive while protecting investors,” said Congressman Davidson. “Our goal is to create a framework that encourages responsible growth and innovation, making the U.S. a leader in the digital economy.”
10XTS’s participation in the Congressional Roundtable underscores its commitment to actively engaging in the regulatory process to drive positive change in the blockchain space. “We’re honored to be part of these critical conversations and to contribute our insights toward a regulatory framework that supports innovation while addressing investor protection,” said Hiles. “As we develop our XDEX platform, we want to ensure that blockchain can advance in a way that aligns with the needs of both the industry and regulators.”
About 10XTS
10XTS is a blockchain technology company dedicated to building compliant, secure, and efficient solutions for asset tokenization and data transparency in financial markets. Its flagship platform, XDEX, offers an ecosystem for the compliant issuance, trading, and management of tokenized assets. Headquartered in Cincinnati, Ohio, 10XTS is committed to advancing blockchain innovation through active participation in policy development and industry advocacy.
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