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US’ New Digital Taxonomy Act Would Allocate $25 Million Per Year to Prevent Crypto Crime

The newly reintroduced Digital Taxonomy Act of 2019 (also known as the Token Taxonomy Act) suggests an annual allocation of $25 million to the Federal Trade Commission (FTC) to prevent crypto-related cybercrime.

Originally proposed in December by Representatives Warren Davidson (R – Ohio) and Darren Soto (D – Florida) — a noted crypto advocate — but reintroduced yesterday, the bill would exempt cryptocurrency from being classified as a security, meaning it would not fall under existing securities law. But, unlike the initial proposal, the bill would include provisions that would supercede “heavy-handed” regulations like that of New York’s “onerous” BitLicense, and clear up conflicting initiatives state-to-state. Generally, the goal of the bill is to create a more certain and welcoming regulatory environment in which companies can operate in order to encourage the advancement of crypto and blockchain innovation in the United States. As it stands now, the United States is still behind many European nations, and some Asian nations as well, in terms of crypto-friendly policies.

The stated goal of the act on the first page of the proposal reads:

“A bill to authorize additional appropriations to the Federal Trade Commission to prevent unfair or deceptive acts or practices relating to digital tokens and transactions relating to digital tokens, and to require a report to Congress on the Commission’s actions related to digital tokens.”

The bill goes on to state that the FTC would be granted $25 million in funding each year from 2020-2024 in order to fight crypto-related crimes. Later on, short definitions of important crypto terms, like “digital token,” are provided for clarity.

If passed, the Bill would require the FTC to provide an annual report on its crypto-related regulatory actions to the House of Representatives’ Committee on Energy and Commerce and the Senate’s Committee on Commerce, Science, and Transportation.