By Mark S. Nelson, J.D.
For federal and state legislation in 2023, the past is likely prologue with Congress divided along narrow majorities between Democrats (Senate) and Republicans (House), major blockchain bills—some of them industry-friendly—shaken by the collapse of crypto platform FTX, and lingering compliance issues related to IRS reporting requirements for crypto firms. Acclimation to new corporate tax provisions, including for stock buybacks, will continue into 2023.
Incoming House Republican leaders on the House Financial Services Committee are likely to press an agenda heavy on oversight of federal financial regulatory agencies and a legislative docket focused on capital formation bills. Hearings into the collapse of FTX may lead to one of the few opportunities for bipartisan legislation on a blockchain regulatory framework. Even before the 118th Congress begins, the lame duck 117th Congress could shore up key pieces of legislation, including a patch to narrow the scope of the IRS crypto transaction reporting provision that was part of the infrastructure legislation enacted a year ago.
On the state front, Delaware’s officer exculpation law has some complicated moving parts that require attention to detail regarding compliance. For certain corporate officers, SEC filings may need to be consulted. Companies mulling amendments to their charters to reflect officer exculpation may be impacted by tepid proxy adviser firm recommendations on Delaware’s officer exculpation law.
These and other federal and state legislative issues will echo into 2023 with all their attendant uncertainties.
For a review of key legislative developments during the past year and a look ahead to 2023, see the following new White Paper by Wolters Kluwer Senior Legal Analyst Mark S. Nelson titled “2023 capital markets legislative agenda suggests new priorities, compliance issues, and less certain pathways to a blockchain framework.”