A bill has been introduced to the New Jersey general assembly that seeks to classify digital assets sold to institutional investors as securities. The proposed legislation specifically targets virtual currencies sold directly to institutional investors and defines institutional investors as entities such as banks, hedge funds, endowments, and pension funds. If passed, the bill would subject these virtual currencies to the state’s “Uniform Securities Law” and any regulations set forth by the Bureau of Securities. However, it is important to note that this bill may not align with the criteria set by the federal Securities and Exchange Commission (SEC).
The SEC has been using securities law to regulate the crypto industry, classifying over 60 crypto assets as securities based on its interpretation of the Howey Test. The Howey Test is used to determine if certain transactions qualify as investment contracts and are therefore subject to securities laws. The issue of whether digital assets are considered securities has been a topic of debate, as seen in the recent case involving Ripple’s XRP. While a U.S. court ruled that XRP programmatic sales and distributions are not securities, it found that sales to institutional buyers could be considered securities due to the link between XRP’s price and Ripple’s performance.
Notable figures in the crypto industry, such as Coinbase CEO Brian Armstrong and investor Mark Cuban, have criticized the SEC’s interpretation of securities law and have called for new regulations tailored to the needs of the emerging industry.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | North America |
| Countries | |
| Sentiment | neutral |
| Relevance Score | 1 |
| People | Brian Armstrong, Herb Conaway Jr. |
| Companies | SEC, Bureau of Securities, Ripple, Coinbase, Division of Consumer Affairs |
| Currencies | None |
| Securities | None |
