Foley Partner Patrick Daugherty Discusses Cryptocurrency Classification with Blockworks

Foley & Lardner LLP Partner Patrick Daugherty was quoted in a Blockworks article, “New CFTC Bill Could Overrule SEC but Leaves Fate of Many Crypto Tokens Unresolved,” discussing cryptocurrency regulation and classification. The SEC has tried for years to classify cryptocurrency tokens, and now, the Senate is looking to pass legislation in this area.

“Congress certainly has the power to classify tokens, just as it can and does lawfully classify other assets,” Daugherty told Blockworks. “For example, Congress has classified ‘stock’ and ‘notes’ and ‘investment contracts’ as securities. This is well within its powers under the Commerce Clause of the Constitution.” Given the sheer number of cryptocurrencies, though, it would be impractical for Congress to assign each a category, which is where regulatory agencies such as the SEC and CFTC step in, Daugherty added.