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BlockchainDevelopmentCompany / USA-TokenTaxonomyAct

Token Taxonomy Act in Markdown form to collaborate on modifying US Federal Laws for a holistic approach to distributed ledger assets
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Clarity for Broker-Dealers and SROs #3

Open 1blockologist opened 5 years ago

1blockologist commented 5 years ago

Exempting digital tokens from the Securities Acts is a great first step. Licensed financial professionals compliant with the Securities act and Self-Regulatory Organizations need codified clarity that they can trade these products on behalf of themselves and clients.

Some organizations feel they can trade registered securities and not anything that falls outside of that, whether they are merely products or not.

1blockologist commented 5 years ago

Also, this proposed act creates the idea that all tokenized unregistered securities are digital tokens, until the issuer wants it to be a security. But that the SEC can at any point in time declare that a transaction and the asset is a security.

Again, this isn't good enough assurance for licensed broker-dealers, as well as unlicensed people facilitating trade in any capacity. Compliance is still as impossible as it is today.

Service providers need assurances that issuers can unilaterally tell them the asset's classification. Currently this is in the form of costly legal opinions. Transitioning away from that with a federal law still needs some way for service providers to know the classification. And assurance that any change of classification doesn't create liability for the service providers for prior actions, and a clear path forward without incurring liability.

The possible improvement would work in conjuction with issue #1