Don Beyer, a Democrat from Virginia, has introduced a new bill requiring cryptocurrency exchanges to document off-chain transactions and over-the-counter (OTC) crypto engagements and store those records in a repository under the control of the U.S. Commodity Futures Trading Commission.
Off-Chain Transfers Are the Subject of New Legislation in the Crypto Industry
A new piece of legislation was launched by Representative Don Beyer (D-VA), purportedly with the intention of protecting participants in the digital asset market. This legislation, known as the "Off-Chain Digital Commodity Transaction Reporting Act," requires "trading platforms to report all transactions to a repository registered with the Commodity Futures Trading Commission (CFTC)."
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| "Off-Chain Digital Commodity Transaction Reporting Act," introduced by Representative Don Beyer. |
Cryptocurrency trading platforms, according to Beyer, are in charge of "reporting all such transactions to a registered digital asset repository of transactions as soon as technically practicable after the execution of each such transaction." All off-chain digital asset transfers must be notified in a 24-hour window under Beyer's legislation. Peer-to-peer swaps, OTC exchanges, and even the straightforward transfer of reserve assets might be considered off-chain transactions.
Beyer said on Thursday that "thousands of transactions each day are conducted off the publicly verifiable blockchain" as consumers "turn to large digital asset trading platforms to conduct their business." "Unfortunately, these private companies' internal record-keeping practices can vary greatly, which leaves consumers and investors open to fraud and manipulation.
The politician from Virginia added:
The goal of this bill is to bring back some openness and confidence to the market for digital assets.
Beyer's news statement emphasized that hundreds of transactions take place "off-chain" every day, hidden from view on the blockchain, as a result of the emergence of cryptocurrency trading platforms and the desire to reduce transaction speeds and costs.
Although the accuracy of these records can change, the bureaucrat asserts that many systems have internal private ledgers to record transactions. Beyer vehemently argues that these discrepancies could lead to conflicts, manipulation, or fraud, stressing that the goal of this legislation is to protect regular investors.
With nine US lawmakers supporting U.S. senator Elizabeth Warren's (D-MA) Digital Asset Anti-Money Laundering Act, Democratic policy planners have their sights set on the cryptocurrency markets for 2023. However, a number of Democratic voters have declared their intention to vote against the Democrats as a result of Warren's and the party's stance on cryptocurrency.
What do you think of the new legislation proposed by the legislator that would oblige crypto platforms to deliver off-chain records to the CFTC within 24 hours? Post your ideas and viewpoints on this topic in the comments area below.