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U.S. Democrat advocates for centralized record-keeping of off-chain crypto transactions

In this post:

  • U.S. Rep. Don Beyer, a Democrat, is proposing legislation that would require crypto exchanges to share off-chain transaction data with centralized repositories for regulatory oversight.
  • The bill aims to protect investors from fraud and manipulation by standardizing internal record-keeping among private crypto entities, covering a wide range of digital commodities, assets, and collectibles.
  • Despite the bill’s objectives, it faces political challenges, including a Republican-controlled House with its own crypto agenda and a Senate that has been largely unreceptive to major crypto legislation.

U.S. Rep. Don Beyer, a Democrat from Virginia, is spearheading legislation to bring transparency to off-chain crypto transactions. The proposed bill seeks to compel major crypto exchanges to share their internal transaction data with centralized repositories. This move is designed to allow regulatory bodies like the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) to have oversight of digital asset movements that are currently only recorded on private ledgers within exchanges.

The bill’s objective: Investor protection and fraud prevention

The legislation comes as a response to the growing concern that internal record-keeping by private crypto entities can be inconsistent. This lack of uniformity, according to Beyer, exposes investors and consumers to potential fraud and manipulation. Moreover, the bill aims to prevent catastrophic events like an FTX collapse by ensuring that exchanges report their internal flow of digital assets to an external repository accessible to U.S. regulators. The proposed law would cover a wide range of digital commodities, assets, and collectibles.

The bill’s framework is somewhat reminiscent of the Dodd-Frank Act of 2010, which mandated centralized reporting for swaps trading information in the wake of the financial crisis. Beyer, who serves as the top House Democrat on the Joint Economic Committee, believes that as consumers increasingly use large digital asset trading platforms, the need for transparent record-keeping becomes ever more critical.

Political roadblocks and ongoing discussions

However, the bill faces significant political hurdles. Currently, the House is controlled by Republicans who have their own crypto agenda and have shown a willingness to move forward without bipartisan support. Additionally, Beyer’s office has reached out to the Senate, which has so far been unreceptive to major crypto legislation in this session.

Despite these challenges, Beyer remains optimistic. He has been in talks with Republicans to integrate his proposal into their market-structure bill, which is already in motion. Beyer’s office is also exploring avenues for collaboration with the Senate, although progress on that front appears to be slow.

Whether or not the bill gains the bipartisan support it needs to move forward remains to be seen, but its introduction is part of the ongoing dialogue about crypto regulation in the United States.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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