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Tuesday, December 6, 2022

US law on cryptocurrencies: the project has leaked

Documents stamped with the words ‘EMBARGOED‘ made the rounds on social media on Monday night and stirred the crypto community on Twitter. But what was the nature of the leak? This is said to be over 600 pages of the US Cryptocurrency Exchange Regulation Bill .

As it stands, the Cryptocurrency Bill provides some clarity. It would make it possible to remove the doubt on certain gray zones and to answer questions hitherto dodged. However, there are a few hard points which, if adopted, could become problematic for investors and companies. Nevertheless, there are some positive aspects to remember.

The content of the bill

Let’s start first with the subject of compliance. DAOs (Decentralized Autonomous Organizations), exchanges and stablecoin providers will have to become registered entities. Otherwise, they will be subject to taxation. In addition, some provisions propose to increase compliance costs.

Investors may have to bear the brunt of this indirectly, as exchanges will potentially want to compensate by charging higher fees . New fee compensation rules have also appeared. This means that platforms will have to pay the government from transaction fees, likely amplifying this phenomenon of cost escalation.

From a more positive point of view for the users, these documents clarify many laws relating to security. Information disclosure laws have been made stricter. This will make it almost impossible for anonymous projects to see the light of day in the future.

In addition, a modification of the terms of the bankruptcy is discovered . According to the bill, deposited assets would be returned to users and not liquidated. This extremely clear proposal could prove beneficial to users if adopted.

The bill also includes a section devoted to the conditions of service of trading platforms. Among other things, it stipulates that any update of the source code would require a new agreement from the user. What’s more, the bill would unify some laws on money transmission between states. Finally, information sharing should become even smoother between government agencies.

What should we think of this bill?

Most members of the crypto community on Twitter have pointed out that the crypto landscape is likely to become stricter as a result of this set of regulations. They add, however, that these documents only appear at the draft stage and that they will probably evolve.

Billy Markus of Dogecoin for example tweeted:

“At this point, it should be noted that the documents that have been leaked are likely early drafts of the bill. Once presented, lobbies enter the scene and try to distort the stated lines.”

Concurring, Adam Cochran, Partner at DAO MetaCartel Venture, comments:

“Since this is only the first form of a bill, that’s when the lobbies will start to get involved and try to shape it and iron out some wording that would pose problem, so all lost hope is not lost. There are good intentions in this project. “

However, he added:

“If it passes in this form, it is good in the long term for large entities, but very painful in the short term for 99% of cryptocurrency users.”

While waiting for their authenticity to be confirmed, the leaked documents should be taken with a grain of salt. It should be noted, however, that with the proliferation of scams abounding in the world of cryptocurrencies, clearer regulations could be beneficial to all users.

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