SpaceChain Foundation’s co-founders Zheng Zuo and Jeff Garzik, together with core strategy advisor Matthew Roszak, share with Paul Brigner, Director of Technology Policy, Chamber of Digital Commerce, about their vision, goals and tech developments.
Author: Chamber
Protecting State Smart Contracts Innovation, One Signature at a Time
Protecting State Smart Contracts Innovation, One Signature at a Time
Smart contracts, virtual currencies, and their underlying blockchain technology are buzzwords crossing beyond an initial niche group of tech followers and into the mainstream. This exponential growth in awareness of these advancements is piquing the interest of state legislators seeking to bring the power of this technology, and its growing economy, to their states. This includes an effort to confirm that so-called “smart contracts” are valid legal instruments under law. And for all of the benefits of smart contracts on a blockchain – transparency, efficiency, automation, and validation – why shouldn’t they?
There’s just one problem. When it comes to smart contracts, the rules to enable this technology are already in place under existing laws. Specifically, the federal Electronic Signatures in Global and National Commerce Act (ESIGN Act) and the Uniform Electronic Transactions Act (UETA) provide an unquestionable legal basis for smart contract technology executing the terms of a legal contract.
Several supportive and innovation-friendly legislators, recognizing the importance of this technology, have introduced new legislation to encourage its growth in their state. While we support their efforts to promote blockchain technology, we believe this action is unnecessary, could actually cause quite a bit of confusion, and, could potentially be preempted under the federal ESIGN Act. If passed, companies, individuals, and their lawyers would have to look at each state’s “smart contracts” legislation, and then compare it to ESIGN and the state’s UETA to ensure there are no gaps, conflicts, or preemption, and then ensure your particular form of “smart contract” is covered by the new law.
The Chamber of Digital Commerce released this Joint Statement in Response to Smart Contracts Legislation supported and signed by more than 450 companies and individuals explaining why new laws for smart contracts are unnecessary.
A smart contract is computer code that, upon the occurrence of a specified condition or conditions, is capable of running automatically according to pre-specified functions. The term “smart contract” is frequently misunderstood and used incorrectly, creating potentially harmful confusion when it comes to applying U.S. law.
Cryptographic signatures in used in smart contracts on blockchains fit within the “electronic signature” definition in existing law. Today, documents are legally effective if signed with the “invisible ink” of software. Electronic signatures are just as legally binding as handwritten ink signatures when establishing a contract.
As we’ve said before, “If it ain’t broke, don’t fix it.” Any state legislation seeking to define smart contracts through legislation, even if it’s in favor of the technology, risks redundancy, inconsistency across disparate state laws, and potential legal action over the question of preemption. Since existent laws already provide sufficient legal foundation for the enforcement of smart contracts, any additional state legislation will hinder innovation and create confusion across the industry. Let’s use this energy and enthusiasm to encourage growth of other innovative opportunities.
Special thanks to Chamber President’s Circle member Jeff Brown of Bonner & Partners for his support of our state smart contracts campaign in securing a number of signatures for our petition.
Chamber of Digital Commerce Welcomes Discover Financial Services to Its Executive Committee
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Chamber of Digital Commerce Welcomes Discover Financial Services to Its Executive Committee
WASHINGTON, DC – April 17, 2018 – The Chamber of Digital Commerce announces the addition of Discover Financial Services (NYSE: DFS) to its Executive Committee, where it will join the Chamber’s efforts to educate, promote and accelerate the adoption of blockchain technologies worldwide. Discover Financial Services is a leading direct banking and payment services company. The company is one of the largest card issuers in the United States and operates the Discover Network, with millions of merchant and cash access locations; PULSE, one of the nation’s leading ATM/debit networks; and Diners Club International, a global payments network with acceptance in more than 185 countries and territories.
Last month, Discover and the Chamber of Digital Commerce hosted Discover Blockchain Technology – a blockchain code-a-thon – which included more than 200 participants focused on developing solutions that showcased innovative developments in payment processing, regulatory technology and digital identity.
“The Chamber of Digital Commerce has developed an impressive platform of industry-leading innovators,” said Joe Bonefas, Vice President – Business Technology: Strategy & Innovation at Discover. “We are pleased to join the Chamber and looking forward to further exploring how we can achieve a brighter financial future through the power of blockchain.”
“We are thrilled to welcome Discover to the Chamber’s Executive Committee,” said Perianne Boring, Founder and President of the Chamber of Digital Commerce. “As a globally recognized leader in payment processing networks, Discover’s expertise and commitment to innovation will strengthen the Chamber’s team of more than 160 member companies dedicated to advancing blockchain-based technologies.”
“As Chairman of the Chamber of Digital Commerce, I’ve witnessed first-hand the extraordinary growth of this leading blockchain organization, it’s membership and the industry,” said Matthew Roszak, Co-founder of Bloq and Chairman of the Chamber. “I’m honored and thrilled to welcome Discover Financial Services, a world-class leader in the financial, banking and payments space to the Chamber.”
About the Chamber of Digital Commerce
The Chamber of Digital Commerce is the world’s largest trade association representing the digital asset and blockchain industry. Headquartered in Washington, D.C., the Chamber is the founder of the Token Alliance, Blockchain Intellectual Property Council, Smart Contracts Alliance, Blockchain Alliance, Global Blockchain Forum and many other key industry initiatives. For more information, please visit: DigitalChamber.org, and follow us on: @ChamberDigital.
Chamber Media Contact:
Marie Knowles
+1 202.656.8037
marie@digitalchamber.org
Chamber of Digital Commerce Adds Five New Members to Its Executive Committee
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Chamber of Digital Commerce Adds Five New Members to Its Executive Committee
Crowe Horwath, Dragonchain, Pillar, Polymath Network and SpaceChain Join the Chamber
April 10, 2018 – Washington, D.C. – The Chamber of Digital Commerce, the world’s leading blockchain trade association, announces the addition of five new global innovators to its Executive Committee membership.
These new Executive Committee members, which offer a wide-range of expertise across a number of business and consumer-focused industries, including accounting, finance, personal data management, space exploration and more, will play an important role in helping to shape the Chamber’s advocacy efforts through its numerous industry initiatives and working groups.
“The blockchain ecosystem is growing at a rapid pace and expanding into new sectors and industries. However, we are also in a time of regulatory uncertainty, where the industry could benefit from added perspective, expertise and leadership,” said Perianne Boring, founder and president, Chamber of Digital Commerce. “We’re proud to welcome these new members to our Executive Committee and applaud their commitment to working with policymakers during this key moment in blockchain’s history.”
New Member Statements:
Crowe Horwath LLP
“From procuring raw materials to distributing products to auditing internal and financial performance, blockchain is impacting every aspect of business in multiple industries. Joining the Chamber of Digital Commerce enables Crowe Horwath to help lead blockchain transformation and advance its application in the industries we serve, including financial services, healthcare, manufacturing, technology and government,” said David Uhryniak, Blockchain Practice Leader, Crowe Horwath LLP.
Dragonchain
“Dragonchain is a philosophically-driven company with a belief that ‘all humans are welcome.’ In a time of industry uncertainty, the Chamber of Digital Commerce’s mission to promote the acceptance of blockchain via education, advocacy and bringing policymakers and industry together, aligns perfectly with Dragonchain’s vision and core values,” said Joe Roets, founder and CEO, Dragonchain. “We are pleased and eager to join the efforts to bring clarity and develop an environment that indeed does foster innovation, jobs and investment.”
Pillar
“At Pillar Project, our goal is to give people around the world control of their personal data,” said CEO David Siegel. “We are active proponents of agile legislation and regulation. That’s why we’re excited to join the Chamber and its leadership and be part of the change in Washington. By working together, we can build a bridge between blockchain innovators and the regulatory and policy communities.”
Polymath Network
“Polymath is pleased to be joining the world’s leading blockchain trade association,” said Chris Housser, COO and Co-Founder of Polymath. “It’s our belief that blockchain technology will revolutionize the finance industry, especially capital markets. We look forward to working with the Chamber and its diverse membership to advocate for the power of this technology.”
SpaceChain
“SpaceChain aims to provide more people access to space. Our blockchain-based open-source satellite network aims to revolutionize the space industry, and solve issues across various industries — from fishing to financial services and mass media,” said Zheng Zuo, co-founder of the decentralized space agency SpaceChain. “Being a member of the Chamber of Digital Commerce reinforces commitment innovation, and to supporting and growing this community. We look forward to collaborating with the Chamber membership and participating in activities to promote blockchain-enabled technologies.”
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About the Chamber of Digital Commerce
Headquartered in Washington, D.C., the Chamber of Digital Commerce is the world’s largest trade association representing the digital asset and blockchain industry. For more information, please visit: DigitalChamber.org..
Chamber Media Contact:
Marie Knowles
Director of Marketing & Programming
marie@digitalchamber.org
+1.202.656.8037
U.S. Crypto Tax Policy Isn’t Just Crazy, It’s Cruel
U.S. Crypto Tax Policy Isn’t Just Crazy, It’s Cruel
Author: Perianne Boring | Category: Commentary
Tags: rants, coindesk, tax policy
This opinion piece by Perianne Boring, founder and president of the Chamber of Digital Commerce, was originally published in CoinDesk’s “Crypto and Taxes 2018.”
“April is the cruelest month….”
So, begins T.S. Eliot’s masterpiece The Waste Land. While the poet wasn’t referring to the U.S. tax season, it fits. And there is something extraordinarily cruel, crazy even, in the IRS’s approach to the tax treatment of virtual currencies.
The blockchain has the power to promote the general welfare and secure the blessings of liberty to ourselves and our posterity. Those objectives just so happen to be two of the six purposes of the American government as laid out in the preamble to the Constitution.
So, it’s awkward that the IRS, an agency of the federal government, adopted an interpretation of the tax law that severely inhibits the achievement of these ends.
The problem? In 2014, the IRS determined that it would treat “convertible virtual currency,” such as bitcoin, as property. That decision subjects it to capital gain (or loss) and investment income tax treatment and associated reporting requirements.
What does this mean? Every time you pay your DISH Network bill, make an Overstock.compurchase, or book a hotel on Expedia using bitcoin, the IRS requires you to record the amount, allocate your cost basis in the satoshi (or ether, or what have you) to make the purchase, subtract the cost basis from the price, and report the difference to the IRS while calculating the capital (long or short term, depending on when you bought that one) gain or loss on your tax return.
And pay a tax, if it’s a gain.
That’s a prohibitive quagmire when selecting a payment method. It’s not just prohibitive. It’s crazy.
Incoherent policy
Stepping back, this is symptomatic of a broader problem with Washington’s disjointed approach to the technology.
As I recently wrote in The Hill (with a nod to Lewis Carroll):
“The breakthrough distributed ledger technology known as the blockchain is being given the ‘Mad Hatter’ treatment by the federal government.
The U.S. Commodity Futures Trading Commission is eyeing virtual currency as a commodity. The SEC is beginning to treat certain tokens as a security. The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has stated that certain activities involving convertible virtual currency constitute money transmission. The IRS treats convertible virtual currency as property.
Commodity? Security? Currency? Property?
Four different, inconsistent categories for the same thing.”
Both the IRS and FinCEN are agencies of the U.S. Treasury yet they have taken wildly differing approaches. Coherence lies in treating virtual currencies as an alternative to government-issued currency for tax purposes.
That’s our tax policy position, and it has the support of the blockchain sector. We developed it in consultation with some of the most respected economic policy experts in the world and after nine months of consultation with many of the more than 160 Chamber members.
Central banks around the world are exploring the concept of central bank-issued digital currency. How can something that is treated as a currency by a central bank be considered property?
Watchdog weighs in
Meanwhile, the IRS is on shaky ground. The Treasury’s own Inspector General issued a detailed report in 2016 criticizing the agency’s stand:
“It does not appear that any of the actions already taken by the IRS to address virtual currency tax noncompliance were coordinated to ensure that the IRS maintains a strategic approach to the tax implications of virtual currencies.”
Further, the Inspector General observed:
“For example, if a taxpayer uses a portion of a bitcoin to buy a cup of coffee each day for one week, he or she will have to determine what portion of the bitcoin was used to make the purchase based on the daily exchange rate, convert it into U.S. dollars, and keep a record of each transaction so that the gain or loss from his or her virtual currency property can be properly reported. [The IRS’ property guidance] does not provide taxpayers with guidance on what records should be kept and how the records should be maintained. Due to the potential complexity of reporting otherwise simple retail purchase transactions related to virtual currencies, further guidance is needed to help taxpayers voluntarily comply with their tax obligations.”
Years later, the IRS has yet to provide such guidance.
To add insult to injury, the IRS issued a “‘John Doe’ summons” to popular exchange Coinbase for the records of half a million bitcoin owners, demanding access to enormous amounts of customer data.
The IRS’s demand provoked criticism from powerful Congressional officials, House Ways and Means Committee Chairman Kevin Brady and Senate Finance Committee Chairman Orrin Hatch. In the face of that and other criticism, the IRS drastically reduced the scope of its demand. Still, this kind of fishing expedition is onerous and scuttles the path to adoption of this technology.
Our policy team is active on Capitol Hill educating Members of Congress and staff on the imperative need for the federal government to have a coherent approach to the blockchain, not a patchwork of contradictory approaches.
The Congressional Joint Economic Committee recently devoted an entire chapter of its annual report to the blockchain, citing our work and recommending: “Regulators should continue to coordinate among each other to guarantee coherent policy frameworks, definitions, and jurisdiction.” Among the most important elements of such coordination is tax treatment.
April, the cruelest month? Quite possibly. Congress should treat virtual currency as an alternative to government-issued currency, giving consumers choice, and expressly exempt convertible virtual currency transactions from investment and capital gains treatment and associated reporting requirements.
A Blockchain Innovators Guide to IP Policy
A Blockchain Innovators Guide to IP Policy
Blockchain technology is beginning to experience more intellectual property questions as adoption continues to grow. The Chamber’s Blockchain Intellectual Property Council, strives to assist companies in navigating intellectual property decision making. For developers in the space looking for background on the subject, the Blockchain Intellectual Property Council’s first white paper “A Blockchain Innovator’s Guide to IP Strategy, Protecting Innovation & Avoiding Infringement” provides high-level guidance for those business decisions surrounding IP.
Read the full white paper and learn more: “A Blockchain Innovator’s Guide to IP Strategy, Protecting Innovation & Avoiding Infringement”
Microsoft and the Chamber Release Collaborative Cybersecurity Paper
Advancing Blockchain Cybersecurity
Advancements in new technology will always be closely followed by new threats from cyber attackers. Unfortunately, no technology is immune. Blockchain is a powerful innovation that is poised to bring substantial positive change to the financial services industry as well as many other industries. However, understanding what’s at risk is a critical first step in protecting cyber assets.
Read the white paper, developed in collaboration with Chamber Executive Committee member Microsoft, which delves into these topics. Specifically “Protecting Against Cybersecurity in a Blockchain World” covers the following topics:
▪ Key Blockchain Features.
▪ Technology-Specific Considerations.
▪ Application of Existing Standards; and
▪ Policy Recommendations.
Blockchain and Cryptocurrency Experts to Address Innovation, Investment and Policy at the DC Blockchain Summit 2018
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Blockchain and Cryptocurrency Experts to Address Innovation, Investment and Policy at the DC Blockchain Summit 2018
Chamber of Digital Commerce’s third-annual event to be held March 7-8, 2018
Washington, D.C., March 7, 2018 – The Chamber of Digital Commerce, the world’s leading trade association representing the digital asset and blockchain industry, today launched its third-annual DC Blockchain Summit in partnership with the Center for Financial Markets and Policy at Georgetown University’s McDonough School of Business. With the dramatic rise in public interest in blockchain and cryptocurrencies over the past year, and a climate of uncertainty around the regulatory and policy landscape, this two-day event will help shape the blockchain conversation and define industry priorities for years to come.
The DC Blockchain Summit will stream live from the Chamber’s website starting at 1 pm ET on March 7.
“This year’s Summit is set to be our most impactful yet as the rapidly expanding economic potential of this industry is taking shape,” said Perianne Boring, founder and president, Chamber of Digital Commerce. “We look forward to bringing thought leaders together in Washington to continue to facilitate a dialogue between those at the forefront of this industry, along with the policy makers who have the ability to foster its growth.”
The Summit brings together industry leaders for timely conversations on market trends and developments, including initial coin offerings, trade and investment in cryptocurrencies, smart contracts, and legislative and regulatory issues. This year’s speakers and panelists include, among many others:
- U.S. Representative Tom Emmer, Member, Congressional Blockchain Caucus
- U.S Representative David Schweikert, Co-Chair, Congressional Blockchain Caucus
- Commissioner Brian D. Quintenz, U.S. Commodity Futures Trading Commission
- Reena Aggarwal, Director, Center for Financial Markets and Policy, Georgetown University McDonough School of Business
- Perianne Boring, Founder and President, Chamber of Digital Commerce
- Marcel Jemio, Chief Data Architect, U.S. Office of Personnel Management
- John Jacobs, Executive Director, Center for Financial Markets and Policy, Georgetown University McDonough School of Business
- Jack Lee, Managing Partner, HCM Capital, Foxconn Group
- Matthew Roszak, Co-founder and Chairman, Bloq
- David Treat, Managing Director, Global Blockchain Lead, Accenture
- Jihan Wu, Co-Founder and Co-CEO, Bitmain
Announcements during the Summit will include:
- Presentation of the Chamber’s Smart Contract Alliance and State Working Group position on state smart contract legislation.
- The unveiling of the first white paper written by the Chamber’s Blockchain Intellectual Property Council, “A Blockchain Innovator’s Guide to IP Strategy, Protecting Innovation & Avoiding Infringement.”
- Microsoft to unveil a white paper, “Advancing Blockchain Cybersecurity: Technical and Policy Considerations for the Financial Services Industry,” written in partnership with the Chamber.
For more details about this event and the Chamber of Digital Commerce, as well as a link to view the event via webcast, please visit digitalchamber.org. Join the conversation on social media by tagging @ChamberDigital and #DCBlockchain.
About the Chamber of Digital Commerce
Headquartered in Washington, DC, the Chamber of Digital Commerce is the world’s largest trade association representing the digital asset and blockchain industry. For more information, please visit: DigitalChamber.org, and follow us on: @ChamberDigital.
Chamber Media Contact
Marie Knowles
+1 202.656.8037
marie@digitalchamber.org
“Discover Blockchain Technology” Code-a-Thon Challenges Participants to Create New Financial Services and RegTech Solutions, March 6-7, 2018
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“Discover Blockchain Technology” Code-a-Thon Challenges Participants to Create New Financial Services and RegTech Solutions, March 6-7, 2018
WASHINGTON, DC – February 16, 2018 – The Chamber of Digital Commerce announces the “Discover Blockchain Technology” code-a-thon, sponsored by Discover Financial Services (NYSE: DSF), Georgetown University’s Center for Financial Markets and Policy, Accenture, 1776, Bloq and Qtum.
The 24-hour competition will focus on three key areas:
- Payments: establishing next generation solutions over the blockchain to increase transaction speed and reduce payments risk;
- RegTech: developing cost effective back-end solutions for ensuring regulatory compliance; and
- Digital Identity: creating trusted, tamper-proof digital identity solutions for consumers and businesses.
“Discover is always looking at ways to improve the payments experience for customers and merchants and we are excited to explore how blockchain may be able to contribute to our mission,” said Bill Dulin, vice president of Global Business Development for Discover. “We look forward to co-hosting the code-a-thon and working with the Chamber and its members on the policy issues impacting the commercial payments and blockchain sectors.”
“We are thrilled to be hosting the Discover Blockchain Technology code-a-thon with Discover, a leader in direct banking and payments,” said Perianne Boring, founder and president of the Chamber of Digital Commerce. “This code-a-thon represents a unique opportunity for the public and private sectors to collaborate and work together to develop next generation blockchain solutions.”
Contestants will compete for up to $15,000 in awards and will be recognized at the opening ceremonies of the DC Blockchain Summit 2018. Government technologists, blockchain technologists, developers, policymakers, Capitol Hill staff, and others are encouraged to participate.
For more details or to register, visit https://digitalchamber.org/code-a-thon-2018/.
About the Chamber of Digital Commerce
Headquartered in Washington, DC, the Chamber of Digital Commerce is the world’s largest trade association representing the digital asset and blockchain industry. For more information, please visit: DigitalChamber.org, and follow us on: @ChamberDigital.
Chamber Media Contact
Marie Knowles
+1 202.656.8037
marie@digitalchamber.org
ANNOUNCING: The Foundation of the Chamber of Digital Commerce
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ANNOUNCING: The Foundation of the Chamber of Digital Commerce
Non-profit Organization Launches to Support Blockchain Research & Education
WASHINGTON, D.C. – December 19, 2017 – The Chamber of Digital Commerce announces the launch of an affiliate organization, The Foundation of the Chamber of Digital Commerce (“The Foundation”). The Foundation is non-profit charitable organization that will sponsor and support research and educational activities to promote the acceptance and use of digital assets and blockchain technologies.
“The Chamber of Digital Commerce has made incredible progress over the past three and a half years in working with industry and the policy community. However, we still have much work to do to reach mass adoption,” said Perianne Boring, founder and president, Chamber of Digital Commerce. “The Foundation of the Chamber of Digital Commerce will serve as a platform to help fuel continued prosperity and growth for the next generation of our industry.”
The Foundation was established to help solve some of the industry’s most pressing issues, including interoperability, scalability and adoption. Donations to The Foundation will be used to support the following initiatives:
- Research and Support of Open Source Innovation
- Education of the Workforce
- Communications to the Public
The Foundation is currently seeking partnerships and faculty across the technology, legal, advisory, and other sectors. Contact us to learn more.
To make a tax deductible donation to The Foundation, please visit www.digitalchamber.foundation.
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About the Chamber of Digital Commerce
Headquartered in Washington, D.C., the Chamber of Digital Commerce is the world’s largest trade association representing the digital asset and blockchain industry. For more information, please visit: DigitalChamber.org.
Chamber Media Contact
Marie Knowles
+1-202-422-2589
marie@digitalchamber.org
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