Congressional Crypto Roundtable: Panel Discusses Token Classification and Compliance for ICOs

More than 45 representatives from major Wall Street firms and crypto companies took part in a meeting to discuss Initial Coin Offering and cryptocurrency regulations in Washington D.C. September 25.The "Crypto roundtable," hosted by Congressman Warren Davidson in the last legislative session week before elections, gave a chance for industry representatives to express their concerns regarding possible regulations of the crypto space.

Namely, experts told lawmakers that there is a pronounced lack of regulatory clarity for ICOs and digital currencies.

Roundtable participants discussed "Token taxonomy," aiming to describe the existing uncertainty around the definition of ICO tokens, as well as the implied regulatory framework.

Experts suggested principles for regulatory compliance and consumer protection, aiming to outline major regulatory approaches that should be implemented in line with the evolving technology.

Addressing the first and main point of the discussion, Marvin Ammori, General counsel at Protocol Labs, stressed a whole "Cascade of uncertainty," associated with existing token classification.

Ammori cited the issues faced by the decentralized file storage project Filecoin, claiming that at the time the company was was launched in 2017, they thought that the Securities and Exchange Commission would consider it a security.

Hilary Kivitz, COO and General Counsel at Andreessen Horowitz Crypto, suggested that tokens operating within a fundraising phase should be considered securities.

"Tokens [are] an asset that facilitate a shared incentive network, where every participant derives value from the growth of the network."

Joshua Stein, CEO at crypto-security firm Harbor, stated that securities regulations "Do not work" in regard to utility tokens in decentralized apps.

Kate Prochaska of the U.S. Chamber of Commerce said that three things need to be done so that the crypto industry "Doesn't go abroad as well." Prochaska named regulatory coordination, clear definitions, and engaging with regulators to seek "No action" letters.