,i #aafth ,,congress #b;d ,session ,h4 ,r4 #hcgh ,,in ,,the ,,house ,,of ,,representatives ,september #bd1 #bjbj,mr4 ,emmer 7for himself1 ,mr4 ,conaway1 ,mr4 ,soto1 and ,mr4 ,khanna7 introduced the following bill2 which was referred to the ,committee on ,financial ,services ,a ,,bill ,to amend the securities laws to exclude investment contract assets from the definition of a security4 #a4 ,short title ,this ,act may be cited as the ,securities ,clarity ,act4 #b4 ,sense of ,congress2 purpose 7a7 ,sense of ,congress ,it is the sense of ,congress that-- 7#a7 among the ways that participants in the digital asset industry have raised capital and earned revenue is through arrangements in which investors provide funds for the development of blockchain-based protocols in exchange for digital assets or the future delivery of digital assets to be used in those protocols2 7#b7 although certain of those fundraising arrangements may be deemed to be investment contracts within the meaning given to that term in section #b7;a7 of the ,securities ,act of #aicc 7the ,securities ,act71 the underlying assets sold pursuant to these arrangements are frequently not themselves inherently securities as defined in section #b7;a7 of the ,securities ,act and1 like other assets sold pursuant to investment contracts in the past1 do not become securities as so defined merely because they are sold pursuant to an investment contract2 7#c7 under ,,sec v4 ,w4,j4 ,howey ,co41 #cbh ,u4,s4 #bic 7#aidf71 and its progeny1 the ,federal courts have consistently held that an investment contract1 for purposes of the ,securities ,act1 means a contract1 transaction1 or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party1 and have not endorsed the notion that an asset underlying an investment contract 7for example1 the orange groves sold in ,howey7 is also conferred security status merely as a result of its being sold pursuant to the relevant contract1 transaction1 or scheme2 7#d7 although the distinction between an investment contract1 which is a security1 and the assets sold pursuant to it had been well-settled for purposes of section #b7;a7 of the ,securities ,act1 the two have been unnecessarily conflated in the context of digital assets2 and 7#e7 this new approach1 which conflates an investment contract and the asset sold pursuant to that contract or scheme1 differs from the approach taken in many other major jurisdictions around the world1 has discouraged development of the digital asset sector in the ,united ,states1 and has hindered innovation in that industry here without providing concomitant benefits to those who enter into investment contracts for the purpose of acquiring digital assets4 7b7 ,purpose ,the purpose of this ,act is to clarify and codify that an asset sold pursuant to an investment contract1 whether tangible or intangible 7including an asset in digital form71 that is not otherwise a security under the ,act1 does not become a security as a result of being sold or otherwise transferred pursuant to an investment contract4 #c4 ,treatment of investment contract assets 7a7 ,securities ,act of #aicc ,section #b7;a7 of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;b7a77 is amended-- 7#a7 in paragraph 7#a71 by adding at the end the following3 ,the term security does not include an investment contract asset42 and 7#b7 by adding at the end the following3 7#bj7 ,the term investment contact asset means an asset1 whether tangible or intangible1 including assets in digital form-- 7,a7 sold or otherwise transferred1 or intended to be sold or otherwise transferred1 pursuant to an investment contract2 and 7,b7 that is not otherwise a security pursuant to the first sentence of paragraph 7#a74 4 7b7 ,investment ,advisers ,act of #aidj ,section #bjb7;a77#ah7 of the ,investment ,advisers ,act of #aidj 7#ae ,u4,s4,c4 #hj;b-#b7;a77#ah77 is amended by adding at the end the following3 ,the term security does not include an investment contract asset 7as such term is defined under section #b7;a7 of the ,securities ,act of #aicc744 7c7 ,investment ,company ,act of #aidj ,section #b7;a77#cf7 of the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#b7;a77#cf77 is amended by adding at the end the following3 ,the term security does not include an investment contract asset 7as such term is defined under section #b7;a7 of the ,securities ,act of #aicc744 7d7 ,securities ,exchange ,act of #aicd ,section #c7;a77#aj7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;c7a77#aj77 is amended by adding at the end the following3 ,the term security does not include an investment contract asset 7as such term is defined under section #b7;a7 of the ,securities ,act of #aicc744 7e7 ,securities ,investor ,protection ,act of #aigj ,section #af7ad7 of the ,securities ,investor ,protection ,act of #aigj 7#ae ,u4,s4,c4 #ghlll7#ad77 is amended by adding at the end the following3 ,the term security does not include an investment contract asset 7as such term is defined under section #b7;a7 of the ,securities ,act of #aicc744