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.
The new home secretary will host talks on how to stop people smuggling in her first major engagement in the role.
Shabana Mahmood will host the so-called Five Eyes security alliance, holding talks between counterparts from the US, Australia, Canada and New Zealand.
The security alliance discussion comes after an estimated 1,000 people arrived by small boat in Britain over the course of a single day, with French authorities saying 24 people were rescued while trying to cross the English Channel.
Ms Mahmood said the numbers, which take the yearly total to more than 30,000 in record time, were “utterly unacceptable” and that she expected migrant returns under a deal agreed last month with France to begin “imminently”.
Sir Keir will now be hoping to draw a line under the fallout of his former deputy’s departure, as well as a summer dominated by criticism of his government’s handling of the small boats crisis.
Ms Mahmood said the Five Eyes intelligence sharing pact would “agree new measures to protect our border”. The group will also discuss new measures to tackle child sexual abuse online, as well as the spread of deadly synthetic opioids, the Home Office said.
Ms Mahmood said: “Rebuilding our reputation on the world stage is how we tackle serious organised crime and secure our borders.”
“The Five Eyes might be drawn from different corners of the globe, but we are united by our alliance,” she added.
“As the security threats we all face become more complex and span continents, we are stronger and safer together.”
She will be joined at the talks by US secretary of homeland security Kristi Noem, Canadian public safety minister Gary Anandasangaree, Australian home affairs minister Tony Burke and New Zealand minister Judith Collins.
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What PM’s reshuffle reveals about his priorities
The Prime Minister has told his new ministers to “go up a gear” in delivering on Labour’s agenda, part of which now involves a toughened immigration policy as he faces pressure in the polls from Nigel Farage’s Reform UK.
In Ms Mahmood’s first full day in the job, she met the head of Scotland Yard to receive a briefing on the policing operation in response to protests in London.
“Supporting Palestine and supporting a proscribed terrorist group are not the same thing,” she said.
“An honour to visit Sir Mark (Rowley) and the Metropolitan Police to see them at work policing protests yesterday.”
Almost 900 people were arrested in central London at a protest against the banning of Palestine Action.
The leader of Britain’s trade unions is to accuse Sir Keir Starmer of failing to deliver the change Labour promised during the election campaign last year.
In his keynote speech at the TUC conference in Brighton, general secretary Paul Nowak will claim that for too many people change still feels like a slogan, not a reality.
After a troubled first year in government that has seen Labour lose support to Reform UK, Mr Nowak will warn the lack of change cannot continue and the government must deliver on jobs, public services and living standards.
And he will claim Rachel Reeves’ budget on 26 November must include windfall taxes on bank profits and gambling companies, a wealth tax on millionaires and the lifting of the two-child benefit cap introduced by George Osborne during the coalition government.
Mr Nowak’s speech comes just days after the unionslost their champion in cabinet, Angela Rayner, prompting fears among delegates in Brighton that the government is poised to weaken its flagship legislation on workers’ rights.
Image: Paul Nowak. File pic: PA
The Conservatives have responded to Ms Rayner’s demise by writing to the new business and trade secretary, Peter Kyle, calling on him to scrap the Employment Rights Bill, claiming it will reduce jobs and mean more red tape and bureaucracy.
But Labour is losing support to Nigel Farage’s party, not the Tories, and will also – potentially – to left-wing parties in future. And in an unusual move, the new left-wing leader of the Green Party, Zack Polanski, will also address the TUC later.
Labour’s election manifesto last year showed a black and white photo of a shirt-sleeved Sir Keir on the front cover with the single word “Change” in red.
In his attack on the government’s first year in office, Mr Nowak will say: “The Tories took Britain to the brink. That’s why last July, the government was elected on a manifesto that promised change.
“But we have to be honest – for too many people, change still feels like a slogan not a lived reality.
“This can’t continue. Throughout our history, we’ve been at our best when we’ve been ambitious for working people.
“So today, my message to the government is simply this.
“Deliver the manifesto on which you won a huge majority last July. Deliver good jobs, decent public services and better living standards in every corner of the country. Deliver the change people voted for.
“And show working-class communities whose side you are on.”
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Could Rayner come back?
On the budget, which Labour MPs believe will be crucial to the government’s hopes of recovery in its fortunes, Mr Nowak will declare: “Introduce a windfall tax on record bank profits and gambling companies. And back it with new taxes on wealth.
“If billionaires can afford fleets of private yachts. Day trips into space. Weddings that shut down Venice – they can pay a bit more tax.
“Do what’s best for those who go out to work, day in, day out, and still can’t get by. Deliver the Employment Rights Bill and deliver it in full.
“And make it clear – a Labour government will never stand aside and watch a child’s potential be wasted because of poverty. Lift the two-child cap, and give our kids the future they deserve.”
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TUC to govt: ‘Deliver on workers’ rights’
And on the issue set to dominate this week’s conference, workers’ rights, Mr Nowak will say: “The government has a manifesto promise to make work pay.
“Stronger rights at work are overwhelmingly popular with voters across the political spectrum.
“The public knows decent work is the best way to deliver the reset this country needs.
“The best way to improve living standards.
“And the best way to rebuild our communities hit hard by low pay and insecure work.
“So here is our challenge to government.
“Deliver that Employment Rights Bill in full and deliver the change you promised at the election.”
But the Tories’ shadow business secretary Andrew Griffith, in a letter to Mr Kyle, claims the bill will be deeply damaging to economic growth and reduce living standards.
“Rather than proceed at this time with a measure which on the government’s own impact assessment will reduce employment and growth, now is the time to put the national interest first,” he wrote.
“Any credible ‘reset’ of this government requires that this bill be shelved and the government look afresh at measures to promote the growth and competitiveness of the UK economy.”