Crypto industry advocacy bodies have slammed a newly proposed United States Senate bill for what they say is a confused approach to regulating the decentralized finance (DeFi) sector.
On July 20, crypto think tank Coin Center and crypto advocacy group the Blockchain Association released separate statements describing the legislation as a “messy,” “unworkable,” and “unconstitutional” way of regulating DeFi.
Introduced on July 18, the bipartisan Crypto-Asset National Security Enhancement Act (CANSEE) bill aims to reign in money laundering violations in DeFi.
If passed, the legislation would extend new penalties to anyone who “controls” or “makes available an application designed to facilitate transactions using a digital asset protocol.” They would also be required to adhere to anti-money laundering and financial reporting standards.
The definition of who or what “controls” a DeFi protocol was left to be made by the U.S. Secretary of the Treasury — a move some pundits say will lead to excessive controls being applied to DeFi.
In its July 20 blog post, Coin Center wrote the bill gives “virtually unbounded discretion to the Secretary to decide what it would take to designate one as having ‘control’ of a protocol.”
Additionally, the think tank declared the bill to be unconstitutional as it would crack down on software developers who — as an extension of free speech — have a First Amendment right to publish code.
Coin Center was also concerned with the scope of the legislation and said by design DeFi is decentralized — meaning it could prove legally troublesome to enforce control over a given protocol.
Kristin Smith, the CEO of the Blockchain Association echoed Coin Center’s concerns and described the new legislation as unworkable.
Blockchain Association CEO @KMSmithDC released the following statement following today’s introduction of the Crypto-Asset National Security Enhancement Act of 2023:
“The Crypto-Asset National Security Enhancement Act of 2023, introduced today by Sen. Jack Reed (D-RI), is an… pic.twitter.com/S65XSUheTW
— Blockchain Association (@BlockchainAssn) July 19, 2023
Smith took aim at the bill for overstating the presence of money laundering in DeFi and crypto more broadly.
“At present, illicit transactions represent a small fraction of total volume: only 0.24% of all digital asset transactions in 2022, far less than in traditional finance.”
Smith said federal law enforcement agencies are already equipped with the tools and expertise to combat this “relatively small but important issue.” Ultimately, Smith denounced the new punitive measures in the bill as redundant.
While crypto organizations have taken aim at the broad scope of the bill, an April 7 U.S. Treasury report found many DeFi protocols are more centralized than claimed, often featuring a high concentration of funds and voting power in the hands of a few token holders.
When TV cameras are let in to film world leaders meeting in person, the resulting footage is usually incredibly boring for journalists and incredibly safe for politicians.
Put through a total of almost 90 minutes of televised questioning alongside the American leader, it was his diciest encounter with the president yet.
But he still just about emerged intact.
For a start, he can claim substantive policy wins after Trump announced extra pressure on Vladimir Putin to negotiate a ceasefire and dialled up the concern over the devastating scenes coming from Gaza.
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There were awkward moments aplenty though.
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Image: The two leaders held talks in front of the media. Pic: Reuters
On green energy, immigration, taxation and online regulation, the differences were clear to see.
Sir Keir just about managed to paper over the cracks by chuckling at times, choosing his interventions carefully and always attempting to sound eminently reasonable.
At times, it had the energy of a man being forced to grin and bear inappropriate comments from his in-laws at an important family dinner.
But hey, it stopped a full Trump implosion – so I suppose that’s a win.
My main takeaway from this Scotland visit though is not so much the political gulf present between the two men, but the gulf in power.
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Trump gives Putin new deadline to end war
Sir Keir flew the length of the country he leads to be the guest at the visiting president’s resort.
He was then forced to sit through more than an hour of uncontrolled, freewheeling questioning from a man most of his party and voters despise, during which he was offered unsolicited advice on how to beat Nigel Farage and criticised (albeit indirectly) on key planks of his government’s policy platform.
In return he got warm words about him (and his wife) and relatively incremental announcements on two foreign policy priorities.
So why does he do it?
Because, to borrow a quote from a popular American political TV series: “Air Force One is a big plane and it makes a hell of a noise when it lands on your head.”
With Amazon and Walmart exploring stablecoins, institutions may be underestimating potential exposure of customer data on blockchains, posing risks to privacy and brand trust.
The European Central Bank may rely on regulated euro stablecoins and private innovation to counter the dominance of US dollar stablecoins, says adviser Jürgen Schaaf.