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Romania Drafts Bill to Regulate Cryptocurrencies

Romania has drafted an emergency ordinance for ICO issuers, a local news outlet reported Thursday.

The draft, which was released by the Romanian Ministry of Finance, states that groups hoping to launch token sales must have their tax and legal records verified. Following that, each member of the issuing organization is required to be approved by the Romanian National Bank (BNR), according to Business Review.

If approved, the draft would make BNR the sole authority over token sales in the country.

BNR claims it would grant authorization to firms when it finds the applicants have “a formal framework for the management of the carefully designed electronic money issuance activity.”

This framework must include a structure with “well-defined, transparent and coherent responsibility lines,” efficient risk-management processes and “adequate internal control mechanisms” for issuing tokens, officials have reportedly outlined.

The draft ordinance also defines cryptocurrency. It explains that the government sees it as “monetary value stored electronically, including magnetic, representing a claim on the issuer issued on receipt of funds for the purpose of performing payment transactions and which is accepted by a person other than the issuer of electronic money.”

Once in effect, the authorization will only last for a 12-month period. If the approved issuers don’t issue the cryptocurrency before the deadline, they will lose the authorization.

The issuers are also required to perform annual audits and submit their activities of accounts to the BNR. Any unauthorized issue of cryptocurrency is considered as” a crime” and the issuers will be punished with an imprisonment between 6 months and 3 years or by fines.

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Congress Advances Bill to Study Crypto Use in Drug, Sex Trafficking

Lawmakers in the U.S. House of Representatives have passed a bill that, if signed into law, would approve a study of the use of cryptocurrencies in the sex and drug trades.

As CoinDesk reported earlier this month, the bill instructs the director of the Government Accountability Office (GAO) to research “how virtual currencies and online marketplaces are used to buy, sell, or facilitate the financing of goods or services associated with sex trafficking or drug trafficking, and for other purposes,” according to the text of the bill

The House passed the bill unanimously, according to its author, Rep. Juan Vargas. The bill now moves to Congress’ upper chamber, the Senate, though its unclear how the measure will proceed there or if U.S. President Donald Trump will sign the bill.

“This bill is an important first step in helping Congress understand the full extent of how virtual currencies are being used to facilitate drug and sex trafficking and will help us propose effective legislative solutions to fight these crimes. I hope to see the same level of support for this legislation in the Senate,” Vargas said in a statement.

This is not the first time the House of Representatives has passed a bill targets sex trafficking, as CoinDesk previously reported. Lawmakers recently passed a bill – FOSTA-SESTA – in February to ban ads for sex workers from online forums, in a move that may have implications for workers who use cryptocurrency.

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Wyoming 'Utility Token' Bill Heads to Governor for Approval

Wyoming’s state legislature has cleared a bill that creates exemptions for certain types of crypto assets from securities laws, with the measure now going to Governor Matt Mead’s for final approval.

The bill passed by a vote of 27-3, public records show, with no senators abstaining. The final vote on the bill was originally expected to take place last week but it was postponed last-minute amid further deliberations.

In that time, however, lawmakers finished work on measures to exempt cryptocurrencies from the state’s money transmission laws and approve the use of blockchain-based records for corporations.

According to data from LegiScan, the ICO exemption measure moved relatively quickly through the Senate, having received committee approval in the past few days and passage via a second chamber reading on March 1.

As previously reported, lawmakers in the state want to put in place carveouts for certain parties – namely developers – involved in the creation of so-called “utility tokens.” Unlike tokens that are a clear investment vehicle, the exemption would apply to those that “has not been marketed by the developer or seller as an investment” and “is exchangeable for goods and services.”

The bill is the first of its kind that would legally define how certain types of cryptographic tokens are treated. Thus far, the measure seems set for complete passage, as evidenced by its unanimous passage in the Wyoming House of Representatives in February.

Another bitcoin-friendly bill is also moving steadily through the Wyoming legislature, having moved largely in tandem with the ICO bill. HB19 – which was also unanimously passed in the House – exempts cryptocurrencies from the state’s money transmission laws.

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Arizona Law Would Define When ICOs Are Securities

The number of blockchain bills before the Arizona state legislature is growing, public records show.

Arizona state representative Jeff Weninger introduced two measures focused on the tech last week, including one that would begin laying down ar regulatory framework for initial coin offerings (ICOs) conducted in the state.

Two new bills introduced by the representative include “virtual coin,” “blockchain” and “virtual coin offering” as new terms to be included in the Arizona government’s list of definitions, particularly as they relate to securities and crowdfunding.

Notably, the first bill defines “virtual coin” as “a digital representation of value that can be digitally traded and that functions as a medium of exchange, unit of account and store of value.”

The bill goes on to define a “virtual coin offering” as any token sale where the token is treated as a security as defined by existing Arizona law. However, tokens which are not marketed as investments and which the purchaser can utilize or redeem within 90 days, according to the bill, would sit outside that definition.

The second bill amends the Arizona Revised Statutes to account for data that is written and stored on a blockchain. In a way, the bill bears a relation to a past Weninger bill which legally recognized blockchain signatures and smart contracts, a measure that was signed into law last year.

Stepping back, the state government has made several steps in recent weeks to broaden the adoption of the tech within the state. Earlier this month, the State Senate completed work on a bill which would allow the government to collect taxes in bitcoin.

Arizona legislature image via Nagel Photography / Shutterstock

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Arizona Moves One Step Closer to Accepting Bitcoin for Taxes

The Arizona Senate has passed a bill that aims to allow residents in the state to pay their taxes with bitcoin and other cryptocurrencies.

As previously reported by CoinDesk, last month a group of lawmakers submitted a bill that, if passed, would enable taxpayers to use bitcoin or other cryptocurrencies in order to pay “tax and any interest and penalties” to the state’s Department of Revenue. The Department, in turn, would have 24 hours to convert those payments to U.S. dollars.

Public records show that the Senate passed the bill on Feb. 8 by a 16-13 margin, with one no-vote. The measure has since been sent to the state’s House of Representatives for further consideration.

While the measure’s success is contingent on both approval in that chamber, as well as any possible reconciliation required if the House and Senate ultimately pass different versions, the successful vote bodes well for its final passage. Late last month, lawmakers on the Senate’s Finance Committee cleared the bill by a 4-3 vote.

Arizona State Rep. Jeff Weninger, one of the co-sponsors of the bill and a sponsor himself of several related bills – including one submitted this week that, if approved, would block local and county regulation of blockchain nodes – recently told Fox News that the tax measure is aimed at making the state an accommodating place for users of the technology.

“It’s one of a litany of bills that we’re running that is sending a signal to everyone in the United States, and possibly throughout the world, that Arizona is going to be the place to be for blockchain and digital currency technology in the future,” he told the news service.

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Tennessee Might Also Recognize Blockchain Data Through Proposed Law

A lawmaker in Tennessee has filed a new bill that recognizes blockchain signatures as legal electronic records, marking the latest legislative effort to do so in recent weeks.

The bill, submitted to the Tennessee House of Representatives by state lawmaker Jason Powell on Jan. 10, echoes similar pieces of legislation filed in Florida and Nebraska.

The measure states:

“A signature that is secured through blockchain technology is considered to be in an electronic form and to be an electronic signature. A record or contract that is secured through blockchain technology is considered to be in an electronic form and to be an electronic record.”

Like the other pieces of legislation, the bill also clarifies that smart contracts – or self-executing agreements that trigger when certain conditions are met – would also have legal bearing within Tennessee.

“No contract relating to a transaction shall be denied legal effect, validity, or enforceability solely because that contract contains a smart contract term,” the text reads.

The move highlights the growing interest among state lawmakers in the concept, with Arizona’s government finalizing a similar law last spring. Indeed, it points to a push to harmonize state laws around electronic records with blockchain-based data.

But as with the efforts in Florida and Nebraska, it remains to be seen how other lawmakers will react as the measures move through the debate process.

A draft version of the bill can be found below:

Tennessee 2017 HB1507 Draft by CoinDesk on Scribd

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Vermont Could Collect Taxes in Crypto Under Proposed Law

A state legislator in Vermont has proposed a bill to create a new regulatory framework for the use of blockchain technology.

Sen. Alison Clarkson introduced the bill on Jan. 3, public records show, and the measure has since been forwarded to the Committee on Economic Development, Housing and General Affairs.

In addition to mandating several reports on cryptocurrencies and blockchain, it notably outlines how the state could classify certain firms as “digital currency limited liability companies,” particularly those that operate their own networks.

Those companies would, if the bill is approved, be required to pay “in the form of its digital currency a transaction tax equivalent to $0.01” whenever a new unit of cryptocurrency is created, traded or transferred.

“A digital currency limited liability company is exempt from taxes otherwise applicable,” reads the bill, which states in its opening:

“This bill proposes to implement strategies relating to blockchain, cryptocurrency, and financial technology in order to: promote regulatory efficiency; enable business organizational and governance structures that may expand opportunities in financial technology; and promote education and adoption of financial technology in the public and private sectors.”

It also outlines protections for how firms govern the protocols that underly a particular cryptocurrency. Those companies “may adopt any reasonable algorithmic means for accomplishing the consensus process” and, in line with the provision, “provide for the modification of the consensus process or the substitution of a new process that complies with the requirements of the law.”

The submission is perhaps unsurprising, given the past interest that has been shown by lawmakers in the state. The legislature approved a blockchain study in June, seeking to assess how the state’s job market may be affected. In 2016, lawmakers finalized a law that made blockchain data admissible as evidence in court.

Clarkson’s new bill also calls for a “Fintech Summit,” which would bring together state and industry stakeholders to discuss how Vermont can promote the tech’s wider use. The state would devote $25,000 to help fund the event, under the auspices of the Agency of Commerce and Community Development.

A full version of the Vermont legislation can be found below:

S-0269 as Introduced by CoinDesk on Scribd

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Trump Signs Defense Bill Authorizing Blockchain Study

President Donald Trump has signed a $700 billion military spending bill that includes a mandate for a blockchain cybersecurity research study.

As CoinDesk reported in September, the bill – as advanced by the U.S. Senate at the time – called for the Department of Defense to investigate “potential offensive and defensive cyber applications of blockchain technology and other distributed database technologies.”

The language itself is part of the wider Modernizing Government Technology Act (MGT), which focuses on improving the government’s IT and cybersecurity systems.

The blockchain study, according to the latest version of the text (which was ultimately signed earlier today by Trump), will constitute “an assessment of efforts by foreign powers, extremist organizations, and criminal networks to utilize such technologies;…[and] an assessment of the use or planned use of such technologies by the Federal Government and critical infrastructure networks.”

The results of the study, according to the text, are due to be delivered to Congress sometime in the next 6 months. While it is set to be prepared by the Department of Defense – which has explored a number of applications in the past – the final product is likely to include input from other federal agencies and departments.

And though it constitutes a minor element in major funding law, the measure, proposed by Sen. Rob Portman of Ohio, could help spur investigation into possible blockchain uses within the U.S. government, some observers say.

“Blockchain was clearly one of the technological capabilities that Congress meant for agencies to look at, and what they were trying to do was create dollars with some flexibility to them so that agencies would have their own discretion on what they invest in,” Trey Hodgkins, senior vice president of public sector at the Information Technology Industry Council in Washington, D.C., told CoinDesk last month.

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Australian Senate Panel Throws Support Behind Crypto Exchange Bill

The Australian Senate has begun deliberating a bill that would apply the country’s anti-money laundering (AML) statutes to domestic cryptocurrency exchanges.

The bill was first unveiled in August – introduced in the House of Representatives, one of two chambers in Australia’s Parliament – revealing that lawmakers are considering approaches such as criminal penalties for unlawful exchange operators. The bill also called for the creation of a so-called “Digital Currency Exchange Register,” which if created would be managed by the Transaction Reports and Analysis Centre (AUSTRAC), the Australia’s financial intelligence agency.

New public documents indicate that the Australian Senate Legal and Constitutional Affairs Legislation Committee has taken up the measure, signifying that the new rules are now being considered in both of the Parliament’s chambers. A 35-page report, published earlier this month, details the various elements of the bill, which focuses on beefing up the rules around AML and know-your-customer regulations.

Notably, the report suggests that the committee is in support of the measure, stating in its conclusion that it “recommends that the bill be passed.”

Back in August, the government said in statements at the time that the measure is intended to “close the gap” between new technologies like cryptocurrency and a set of rules in need of an update.

“The bill will … close a regulatory gap by bringing digital currency exchange providers under the remit of AUSTRAC,” officials said at the time.

It’s unclear at this time whether other committees within the Australian Senate will take up the bill.

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US Lawmakers Seek Tax Exemption for Bitcoin Transactions Below $600

Two members of the US House of Representatives have filed a bill seeking to create a tax exemption for purchases made with cryptocurrencies.

Back in 2014, the Internal Revenue Service declared that it would consider bitcoin (and other cryptocurrencies) as a kind of property for tax purposes. Any profits made when selling or exchanging a cryptocurrency triggers a capital gains requirement. Yet due to the wording of the IRS decision, that covers any transaction involving bitcoin, including an oft-mentioned purchase of a cup of coffee – essentially meaning that if you bought some bitcoin at $1, and spent it on a $2 cup of coffee, you would owe tax on the difference.

Reps. Jared Polis and David Schweikert, who co-lead the Congressional Blockchain Caucus, are hoping to alleviate some of the issues resulting from that ruling with the Cryptocurrency Tax Fairness Act.

Unveiled today, the measure, if passed, would create a de minimis exemption for cryptocurrency payments below $600 after December 31 of this year. Put more simply, transactions involving a cryptocurrency below that threshold wouldn’t trigger a capital gains liability.

As the text of the bill states:

“Gross income shall not include gain from the sale or exchange of virtual currency for 5 other than cash or cash equivalents….[if the amount of gain excluded from gross income under subsection (a) with respect to a sale or exchange shall not exceed $600.”

In an interview with CoinDesk, Jerry Brito, executive director of the DC-based nonprofit Coin Center – which helped advocate for and organize the bill – compared the move to one taken previously by Congress to create an exemption for purchases made using foreign currency.

“What we have done with this bill is do something very similar, to create a de minimis exemption for small purchases.”

As for the prospects of the bill in a Congress beset by Republican infighting and looming fights over the federal government’s funding and ability to borrow, Brito struck a cautiously optimistic tone, pointing to the ongoing effort to reform the US tax system as aligning with the goals of the new bill.

“This should be unobjectionable to members of the Congress,” he said.

The full text of the bill can be found below:

CTFA by CoinDesk on Scribd

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