The expected project of Senator Cynthia Lummis was leaked on Twitter, although its veracity has not yet been confirmed, which is presented today before the US Congress.
- The alleged law under embargo was leaked on Twitter
- Exchanges and DAO must be entities registered in the US
- A self-regulatory institution would be created
- Supervision of the crypto ecosystem would be greater
- Today the senator will present the bill before the US Congress
The bill by US Senator Cynthia Lummis that addresses the regulation of cryptocurrencies in a comprehensive manner and that seeks to introduce cryptocurrencies into the financial system of the United States has been awaited for a long time, as has been reported on several occasions.
Today is the day that the senator will present her legal proposal to Congress, however, some media impatiently anticipated the official information and released an embargoed copy of it. It is worth noting that the same copy is also in the web scribd and It can be downloaded here.
In addition, since last night a set of documents with the watermark ‘EMBARGOED’ It started circulating on social media. When the user of Twitter ‘bot_slam’ tweeted the images, people in the crypto community gradually began to discuss the legal proposal.
Here is the tweet that started all the ruckus:
here you go
(plz RT) pic.twitter.com/UOVhIUiUBu
— slam (@bot_slam) June 7, 2022
means like Watcher Guru they wonder: “What was leaked? A CFTC law under discussion? An SEC memo? A premature company presentation? Well, it seems not. The 600+ page US crypto bill has apparently been leaked. Yes, you read that right, the US Cryptocurrency Bill.”
Before continuing to present what the document says, it is important to make it clear that What has been published is a leak (perhaps it is a draft and not the final version of it) and it will be today, when the bill is presented to Congress, that we will know the exact content of the document and if it matches 100 % with the filtered.
Project today to Congress
As we said, Senators Cynthia Lummis and Kirsten Gillibrand will introduce the crypto regulations bill to the US Senate today. This would be the first bill of its kind aimed at fully incorporating digital assets into the US financial system. As stated, it is designed to clarify cryptocurrency regulations while providing the most reliable and acceptable classification of digital assets available globally.
the bill suggests the creation of a self-regulatory institution to be in charge of cryptocurrencies and other digital assets. The project draft also indicates that seeks to convert to Commodity Futures Trading Commission (CFTC) in the crypto market regulator. However, this plan could conflict between said commission and the Securities and Exchange Commission (SEC).
More about the project
According to some informants, as such, the crypto bill provides regulatory clarity and dispels the doubts that currently persist. However, some issues raised also concern the crypto community.
One of these issues is that exchange, the Decentralized Autonomous Organizations (DAO) and stablecoin providers they would have to become registered entities. If they are not registered in the United States, they would presumably be subject to tax.
The bill also outlines separate provisions regarding the exchanges crypto. It is proposed to increase compliance costs. Investors might have to indirectly bear the burden of the same as exchanges would try to recover the same through higher fees.
Also, the concept of bankruptcy or bankruptcy was also changed. According to the bill, deposited assets would be returned to users and they would not settle. This clear proposal could end up being beneficial for all users if it is approved. Fee clearing rules mean exchanges would have to pay the government fees, and the same would likely increase costs.
The bill also has a separate section that talks about the terms of service in relation to the source code version. According to it, any update of the source code would require a new agreement.
In addition, a number of other regulators have been given intersectional powers to investigate and provide regulatory advice in new areas. The proposal also gives depository institutions the right to issue stablecoins. In addition, the bill also clearly outlines other compliance requirements and penalties.
The bill also seeks unify some money transmission laws across states. Additionally, the information sharing landscape is set to be even more seamless between agencies.
Likewise, many crypto assets would be regulated by the CFTC as commodities. Any platform designed to facilitate the conversion of assets will be regulated as a cryptocurrency exchange.
In this sense, the state of protocols driven by Automated Market Marker, AMM, non-custodial exchanges and other DeFi protocols remain unclear. However, it will be much more difficult for them to remain anonymous.
The general level of regulatory scrutiny increases, which will, on the one hand, increase compliance costs, but will also put an end to insider trading and listing scams.
The proposed regulation increases the power of regulators to control and regulate the activity of market participants in terms of requirements and sanctions.
Summary of key points
This is a technical summary of what seem to be the key points of the project:
- Requires DAOs to be registered entities in the US. If you are not registered in the US, the country considers you taxable.
- Requires all stablecoin exchanges and providers to be registered entities.
- It puts a large number of crypto assets as commodities under the supervision of the CFTC. If there is any debt, equity, profit income, dividends of any kind, then it is now expressly not a digital asset product.
- Exchange supervision is greater. Huge increase in compliance costs (so fees would go up).
- Changes in the definition of bankruptcy favor users by making it clear that deposited assets will be returned to users and will not be liquidated.
- Any source code update requires a new agreement.
- Gives depository institutions the right to issue stablecoins.
- It would seek to unify some money transmission laws in all states. However, it would also expand the exchange of information between both state and federal agencies.
Most of the people in Twitter they described that with this legislation the crypto landscape would end up becoming even more strict in the future.
In this regard, Billy Markus, co-creator of Dogecoin, he tweeted:
It looks like the new leaked US crypto bill is going hard on shitty tokens, DAOs, DeFi, stablecoins and exchanges
looks like the new US crypto bill that has been leaked goes hard after shit tokens, DAOs, DeFi, stablecoins, and exchanges pic.twitter.com/wjcAUSi3RS
— Shibetoshi Nakamoto (@BillyM2k) June 7, 2022
Adam Cochran from Cinneamhain Ventures He also tweeted about the leaked project articles:
Wow, first read some good stuff that moves us forward, but a lot of hard stuff.
Overall, this gives the US crypto clarity, but it will come at a huge cost and growing pains.
This is what I noticed on the first reading.
Wow, so first read some good stuff that moves us forward, but a lot of rough stuff.
Overall this gives US crypto clarity but it will have a huge cost and growing pains.
Here’s what I noticed in the first read. https://t.co/Cb1TM0DVJs
— Adam Cochran (adamscochran.eth) (@adamscochran) June 7, 2022
He added that he considers that there are good intentions with the project. He maintains as a positive that he makes it clear that crypto is allowed in the US. However, he believes that “it intends to regulate it as strictly (or even more so) than banks and current financial service providers.”
Add that “if so, and if it happened this way, it is a good *LONG* term for large entities, very painful in the short term for 99% of cryptocurrencies”.
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