Rep. Warren Davidson, R-Ohio, and Rep. Darren Soto, D-Fla., are seeking to exempt digital currencies from certain federal taxation and securities laws.
The bill defines a virtual currency as "a digital representation of value that is used as a medium of exchange and is not currency." The definition of a "digital token" excludes "a representation of a financial interest in a company, including an ownership or debt interest or revenue share."
It will exempt a digital token from the definition of a security under the Securities Act of 1933 and adds the line "receiving deposits, providing custodial services, or exercising fiduciary powers" to the definition of a bank under the Securities Exchange Act of 1934. The bill will also add the same line to the Investment Advisers Act of 1940 and Investment Company Act of 1940.
The bill will not include profits from the sale of a virtual currency under gross income as defined in the Internal Revenue Code of 1986 if the gain from the sale will not exceed $600. It will also not treat virtual currencies held in individual retirement account investments as distributions.