Draft of US Crypto Bill Gets Leaked to Social Media, DAOs and DeFi are TargetsJune 7, 2022
A Glance that Might be Real
There are rumors flying around on social media concerning a crypto regulation bill the US parliament is working on. The document being circulated has a watermark tagged “EMBARGOED” across it. It consists of information regarding likely actions from regulators, and it is contained in 600 pages of the document.
Copies of the bill were posted on Twitter by a user of the microblogging platform by the name @bot_slam. It is said to be the same bill being worked on by Senators Kirsten Gillibrand and Cynthia Lummis.
It was revealed that the actions demanded by the bill cover a wide range and some of them are very demanding. If the document is authentic, the demands will be creating a lot of debates across several sectors.
Part of the changes in the leaked document includes having entities that are not registered in the US become taxable. The leaked bill equally reveals that most assets would become termed as commodities. This answers some questions about the state of crypto if they are actual securities.
The decentralized finance market seems to be the major target of the legislation. It does not come as a surprise since it has been under the scrutiny of legislators globally for some time. Some of the challenges therein include the practical implementation of what the bill contains – it is much easier to control centralized platforms.
The Real Effect of Decentralization
Exchanges and stablecoin issuers will be required to register in the United States. The move could have huge impacts on the decentralized finance sector. DAOs that wish to operate in the US will also be required to register in the country.
It is known that the execution and implementation will be difficult due to their decentralization. Most importantly, there is a list of requirements around disclosure with regard to listing tokens. Exchanges are going to play a major role and it could lead to more costs.
More Power Coming the Way of Regulators
Regulators in the US have been demanding more power to supervise the digital asset market. The CFTC and SEC have been finalizing efforts at creating more departments.
It is obvious that the speculated bill offers relevant agencies such powers as they have sought after. They will be able to investigate and advise on more regulations as they have always wanted to do. Agencies will equally be required to share intelligence and information among each other as occasion demands.
But with regard to projects whose founders are unknown and decentralized finance in general, things might become worse. The near-term effect of the bill, if genuine, might be quite strong, but it permits the existence of crypto. It seems the US has no intention of banning crypto but to have firm control of it.