U.S. Law: Crypto is Money, Property, a Commodity, and a Security, all at the Same Time

Abstract

This brief article comments on the consequences of having cryptoassets simultaneously regulated in the U.S. by the I.R.S. (as property), FinCEN (very much like money), the CFTC (as commodities), and the SEC (as securities). While the first cryptoassets were indeed all “true” cryptocurrencies (interests designed to supplant the role of government-backed fiat currency), many crypoassets today have other functionality. Unfortunately, the tendency of each regulatory agency to regard all or virtually all cryptoassets alike has produced a set of overlapping rules and requirements that is likely to hamper appropriate and desirable innovation in this space. This article suggests that regulatory agencies move away from regulating crypto monolithically, and instead take a more nuanced approach that looks at the genuine functionality of the asset as well as the motivations of those involved in issuing or exchanging such interests.

Keywords: Cryptocurrency, Cryptoassets, Virtual Currency, SEC, CFTC, ICO, regulation

JEL Classification: K2