The crypto world is attempting to comprehend the ramifications of releasing over 600 pages of the US crypto law.
Crypto Twitter is currently humming with debates and dialogues concerning space-related legal restrictions.
This occurred following the disclosure of a batch of documents. The 600+ pages of the document are supposed to cover the US crypto bill currently being drafted. The slam bot was responsible for the original release.
Several entities, including Dogecoin co-founder Billy Markus, obtained the materials and expressed their thoughts. Billy started a Twitter discussion about it. According to him, the bill is intended to be harsh on cryptocurrencies, DeFi, DAO, stablecoins, and crypto exchanges. Billy believes that going hard on exchanges will have a long-term influence on the sector.
He said, “looks like the new US crypto bill that has been leaked goes hard after sh.t tokens, DAOs, DeFi, stablecoins, and exchanges.”
He further said: “All they really gotta do is go hard after exchanges and the party is over.”
No more unnamed projects
From another perspective, the bill appears to be an attempt to protect cryptocurrency users. To begin with, all crypto companies functioning in the space, such as DeFi platforms, crypto projects, Exchanges, and DAOs, would need to be legally registered.
This means that tokens created by anonymous authors will no longer be seen in the industry—no more Bitcoin-like tokens. These circumstances enhance the likelihood of rug pulls, which result in consumers losing money to fraudsters.
The bill brings clarity to places where there has long been ambiguity. Exchanges, DAOs, and Stablecoins will be required to register or face taxation.
Several assets have been classed as commodities. For example, according to the CFTC’s standards, if any token involves profit/revenue, dividends, equity, or debt, the asset ceases to be a digital asset. If there is any type of debt, equity, profit revenue, or dividend, it is no longer a digital asset commodity.
In terms of disclosure, tighter steps will be implemented to limit the possibility of projects being formed by anonymous characters. The bill also offers an increase in exchange for compliance costs, which means investors will be on the hook because the platforms will pass the costs on to users. New disclosure rules would make it very impossible for anon-run initiatives to comply with the law. – Anything that exchanges one digital asset fulfills the definition of a digital asset exchange. The present language appears to incorporate AMMs.
When a bankruptcy petition is filed, exchanges will be forced to repay the users’ assets rather than liquidate them. This is a significant victory for users. Exchange oversight is at an all-time high. Increased compliance costs (therefore higher fees), but possibly better listing and no trading against their users. Fee balancing requirements require exchanges to pay government fees, which will certainly raise expenses.
The bill also mandates that exchanges have Terms of Service that users must agree to. Users will be required to confirm their agreement anytime the exchange’s source code is updated. Depository institutions will be able to create stable coins.
Bankruptcy definition amendments benefit users by clarifying that assets placed will be restored to them rather than liquidated.
However, the bill clearly states the sanctions that will be imposed in the event of noncompliance.
“The Crypto Space Requested Regulation”
The law, on the other hand, recommends an increase in compliance expenses. As is customary, businesses pass on these additional costs to the user, which means that crypto exchanges will raise transaction fees on their platforms.
They would also have to pay taxes on these fees. Essentially, the crypto sector sees this law as a double-edged sword.
The crypto market, according to Billy, is full of rubbish and a high concentration of crooks. This arena, in his opinion, has been begging for regulation. Despite being one of the co-founders of DOGE, Billy isn’t precisely pro-crypto.
It is still only a draft bill
It’s essential emphasizing at this stage that the measure is still in draft form. Lobby organizations, as is always the case with bills, will be involved in the refining process to produce a final, all-inclusive bill.
It’s unclear when the bill will be introduced for debate or passed by MPs. It is also unknown who leaked the documents.