Sponsors (2)
Official title: To amend the securities laws to exclude investment contract assets from the definition of a security.
Introduced March 26, 2025 by Thomas Earl Emmer · Last progress March 26, 2025
The bill narrows the scope of federal securities law for certain fungible, ledger-recorded tokens to lower costs and spur native-token innovation, but it does so by removing investor protections and oversight, raising risks of fraud, market abuse, and potential systemic consequences for ordinary investors and taxpayers.
Digital-asset developers and peer-to-peer token holders face clearer exclusion from federal "security" definitions for certain fungible, cryptographically secured ledger tokens, reducing SEC registration risk and legal uncertainty for those building and using native tokens.
Issuers of qualifying tokens (including small businesses and some financial firms) will face lower compliance burdens and potential cost savings by avoiding securities registration and associated disclosure requirements.
A clarified definition tied to cryptographically secured public distributed ledgers could encourage innovation and attract investment in native ledger-based token projects, potentially spurring new products and jobs in the crypto/tech ecosystem.
Retail and other investors who buy tokens that qualify for the exclusion lose securities-law protections (disclosure, registration, private remedies), increasing their risk of financial loss.
Large-scale issuance and market activity in unprotected tokens could raise systemic risk and, in a crisis, create financial-stability problems that translate into taxpayer exposure or broader market disruption.
Removing these tokens from securities statutes reduces regulator oversight and enforcement tools, which could enable scams, market abuse, or other misconduct with fewer remedies available.
Based on analysis of 2 sections of legislative text.
Adds an "investment contract asset" definition for certain fungible ledger-based tokens and excludes that category from federal securities definitions across major securities laws.
Creates a new legal category called “investment contract asset” for certain fungible digital tokens recorded on public distributed ledgers and then carves that category out of the statutory definitions of “security” across major securities laws. The change narrows what counts as a security by excluding tokens that meet the new definition (peer-to-peer transferable, ledger-recorded, sold under an investment contract but not a security under existing first-sentence tests). The result is a targeted, deregulatory change to securities statutes that affects how digital assets, advisers, exchanges, and investor-protection rules apply to some cryptocurrencies and tokenized assets.