Tuesday, June 7, 2022

US may be about to regulate DeFi and DAO

 A leaked copy of a US bill related to crypto was circulated by the Twitter community on Tuesday. The 600-page copy highlights several key areas of interest to regulators including DeFi, stablecoins, decentralized autonomous organizations (DAOs), and exchanges.

User protection seems to be the main focus of regulators. Accordingly, the policies require any cryptocurrency platform or service provider to be legally registered in the United States, including the DeFi protocol or the DAO.

This will most likely limit the development opportunities of anonymous projects here. Cryptocurrency platforms that operate but are not registered in the country are still subject to taxes, and the definition of DeFi can seem vague.

The leak bill also attempts to provide more clarity on securities laws as it relates to digital assets, seemingly satisfying a nagging request from the crypto community and lawmakers alike. . According to the U.S. Commodity Futures Trading Commission (CFTC) definition of a commodity, if there is debt, equity, profit revenue or dividends of any kind, it is clearly not must be a digital asset commodity.

The new bill proposes to increase the exchange's compliance costs, which in turn could lead to increased transaction fees. Any protocol or platform that trades digital assets would be classified as an exchange, which means automated market makers would fall into this same category.

The bill goes on to ensure that exchanges cannot liquidate user funds in the event of bankruptcy and adds that they must issue terms of service for users to agree to before using the service.

The leak bill proposes clear policies to bring this nascent market into the realm of legislation. Many experts point out that although the policies listed seem to encourage close scrutiny, they are only drafts.

“Since it is only the first draft of the bill, it is time for lobby groups to step in and help shape it, removing some problematic language, so it is not entirely lost hope. hope. Contains good intentions,” tweeted professor and investor Adam Cochran.

Dogecoin co-founder Billy Markus also commented on the leaked bill and hinted that the new policies will be tough on DeFi, DAOs, and anonymous projects.

“All they are really going to do is get tougher than just the exchange and the end party.”

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