The 600-page copy of the US’s leaked bill focuses on regulators’ concerns surrounding decentralized finance [DeFi], stablecoins providers, decentralized autonomous organizations [DAOs], and crypto exchanges.
The documents titled “EMBARGOED” were posted on Twitter by a user Slam and soon became a hot topic among crypto Twitterati. Some users however pointed out that the draft was earlier reported by local news outlet Barron’s a few days back.
According to the June 3 coverage, the bill contains substantial changes co-authored by Senators Cynthia Lummis [Wyo.] and Kirsten Gillibrand [N.Y.]. It is unclear at the moment if the leaked bill is the newest spin of the earlier versions or is completely different.
Having said that Adam Cochran, Partner at Cinneamhain Ventures tweeted a detailed thread highlighting the key aspects of the draft as well as offered his insight.
In the latest draft, regulators seemed to put more emphasis on all crypto-related firms to get legally registered, or else, it will be viewed as “personally taxable”.
Cochran also cautioned that anon-run projects, non-regulated DAOs, and DeFi might face difficulties to comply with the law.
The bill seeks to offer more clarity on securities laws. Under the Commodity and Futures Trading Commission or CFTC definition -“If there is any debt, equity, profit revenue, or dividend of any variety, then it is now expressly not a digital asset commodity”.
The exec pointed out that strict regulatory oversight might lead to an increase in compliance costs which according to Cochran might, in turn, ensure a better listing and prevent trading violations.
US Draft Bill would provide clarity on a lot of things?
“Bankruptcy definition changes are a win for users making it clear assets deposited would get returned to users and not liquidate,” he added.
Another aspect, the expert noted is the proposed bill would grant depository institutions the right to issue stablecoins which he claimed would provide much-needed clarity on compliance requirements and penalties.
Cochran then concluded his post by saying that the draft bill is still incomplete and there would be further inputs from various lobby groups who would help stitch it into its final shape.
He then stated, “If it passed in this form it’s good in the LONG term for big entities, but super painful near term for 99% of crypto.”