Securities regulation remains an uphill task for the federal legislators from California, in the framework of the monitoring of the crypto-industry. However, a new draft law intended to clarify the status of crypto-currencies is on the horizon.
Generalization of the test of Howey
The draft law envisaged by Ian Calderon, the majority leader of the Assembly of California, is emerging in two major areas: first, to update the law on securities of the country; and, secondly, gather the test of Howey in order to define a legal basis for the crypto-currencies.
Fyi, the test of Howey includes criteria that are significant that are prescribed by the federal State to be able to declare if an asset is classified as investment contract or not.
“An investment contract, except for any digital asset that meets one of the following criteria, is not likely to be an investment contract “. supports the bill.
The criteria is quoting as follows :
“For the purposes of the securities act, an investment contract (undefined by the act) means a contract, transaction or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third person. “a linear reading of the test of Howey.
An extension to the national level ?
Of course, this new legislation is a real springboard to clarify the status of digital assets as securities, but its effectiveness at the national level is not yet confirmed.
However, the efforts by the state of California in the context of the new technological policy are supported by the american State, so that it can evaluate its feasibility at the national level. And these developments will also go hand-in-hand with the redefinition of the roles played by the Securities and Exchange Commission (SEC), according to a legal point of view.
Indeed, industry players have always complained about the harsh control exercised by the SEC in the federal sector, while it has very little evidence to confirm if their chips are actually titles or not.
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