Allegedly Leaked US Crypto Bill Shows Regulators Might Go Hard This Time

By Kevin • June 8, 2022 9:55 pm • Comments

This past Monday, multiple online sources have reported that an allegedly leaked US crypto bill has finally made it out to the public.

The crypto bill was apparently over 600 pages long and may provide additional regulatory clarity that the crypto industry very much needs.

With that being said, there were also some parts of this leaked bill that reportedly would be bad news for investors which makes it not the ideal bill that many were hoping for.

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The bill states that DAOs, exchanges, and stable coin providers would have to become registered entities which may put more pressure on crypto businesses than necessary.

However, some security laws have been made more clear which makes it easier to decide whether a crypto would be considered a security or commodity.

Watcher.guru reports:

Many security laws have been re-painted with clarity, and a host of assets have been re-classified as commodities under the CFTC.

Amongst all clauses, the one that stood out was that if there is any debt, equity, profit revenue, or dividend of any variety, then the underlying asset would not be labeled as a digital asset commodity anymore.

The disclosure laws have been made stricter and it’d be near impossible for anonymous projects to existing.

Separate provisions with respect to crypto exchanges were also outlined in the bill.

Compliance costs are proposed to be risen. Investors might have to indirectly bear the burden of the same as exchanges would try to recover the same via higher fees.

Some good parts of the bill include changing bankruptcy conditions where user deposits would be returned to the user in the case of a bankruptcy.

This is currently not the case for many exchanges like Coinbase which will use the customer deposits to bail themselves out during a bankruptcy.

Also, other regulators besides the SEC would also be granted authority in the regulatory jurisdiction of crypto and does better in outlining the compliance requirements.

All in all, there were many parts of the bill that would advance the crypto industry forward, but there were still parts that would restrict growth and innovation.

Many investors are concerned that this bill may be just the beginning of a series of new bills that aim to regulate the crypto industry in a much stricter way.

Benzinga reports:

The Fine Print: “The bill clarifies the universe of digital tokens that would fall under the SEC’s jurisdiction.

The latest draft restricts the SEC’s authority instead of expanding it,” said a spokesperson for Lummis to Barrons.

The CFTC would oversee trading in spot markets. The draft bill also puts forth recommendations for enhanced decentralized finance (DeFi) and decentralized autonomous organization (DAO) regulation.

It broadly classifies fungible tokens as securities while making a case for non fungible tokens (NFTs) to be an entirely new asset class.

Online reactions: The crypto community weighed in on the leaked copy of the draft bill as it began making the rounds on social media.

To end on a good note, at least this new bill would clearly define the SEC’s jurisdiction within the crypto space and would restrict the SEC’s authority.

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