New Hampshire crypto commission urges lawmakers to take ‘proactive’ stance on regulation
Written by Keely Quinlan
In a 67-page report released on Friday, New Hampshire’s Commission on Cryptocurrencies and Digital Assets made 12 recommendations urging lawmakers to take a proactive stance in creating new legal frameworks for blockchain technologies.
The recommendations included building out a path for cryptocurrency companies to achieve legal entity status and establishing a “Blockchain Dispute Docket” in the New Hampshire Superior Court.
The commission was created by an executive order from Governor Chris Sununu in February 2022 to review the state’s laws governing crypto and other digital assets — and their impact on citizens and consumers — and make recommendations to state lawmakers on how to keep pace with it developing technology.
The final report was unanimously approved in December with two members abstaining because they work for government agencies that will be responsible for administering the potential laws applicable to crypto activities, such as the NH Department of Justice and the NH Bank Department.
According to the report, current regulations and treatment of crypto assets in federal and state law are unclear. While saying that crypto offers unique economic and innovation opportunities, the report also cited blockchain’s involvement in unregulated markets and fraudulent activities, such as Sam Bankman-Fried’s mishandling of client funds that led to the recent collapse of the crypto exchange and his hedge fund, FTX.
“However, as demonstrated by developments throughout 2022 (including when one of the largest Crypto exchanges collapsed amid allegations that the founder and CEO, formerly one of the most prominent figures in the Crypto ecosystem, allegedly perpetrated criminal fraud resulting in the loss of billions of dollars of customer funds), real-life applications of these technologies, with real people, are subject to the same human frailties (greed, jealousy, arrogance, ignorance, incompetence, carelessness, naivety) that have plagued human societies for centuries; and which a vast body of legislation has been developed over centuries,” the report said.
To counter these potential pitfalls, the Crypto Commission recommended that New Hampshire take a proactive approach to “build a better legal infrastructure for the sound development of Blockchain technologies and its applications.”
“New Hampshire should be a leader in supporting the development of solid Blockchain-based businesses and applications through the adoption of clear and sound legal rules,” the report states.
The commission’s report made 12 specific recommendations. Along with giving limited liability legal status to crypto companies and creating a specific court to resolve disputes, the report recommended resourcing law enforcement for training that would protect consumers and investors.
To strengthen the state’s attractiveness to the new technology, the report recommended the state establish a task force to evaluate how blockchain technologies can be used to improve current systems for archiving and storing official government records, and improve communications infrastructure to support applications of blockchain technologies.
New Hampshire isn’t the only state or local entity considering how to rein in crypto and blockchain technologies — or make it more attractive to set up shop. In 2016, Illinois established a Blockchain Initiative that explored the possibility of using Blockchain in government. And Colorado, for example, now accepts tax payments in crypto.
Some cities, like Miami, are taking blockchain integration even further, launching their own digital coin, MiamiCoin. Others, including Austin and Philadelphia, are looking at the possibility.
In a press release, Sununu said he created the commission for recommendations that would “promote economic growth, foster innovation and meet changing customer needs while ensuring safety, soundness and consumer protection.”
“This report is comprehensive and timely, providing specific recommendations that will establish New Hampshire as a leading jurisdiction for the development of sound and effective applications of blockchain technologies, including proposals to clarify current laws and to support law enforcement in their efforts to protect New Hampshire consumers and investors,” Sununu said.
