US Congressman Proposes Bill for Off-Chain Crypto Transaction Reporting
US Representative Don Beyer is advocating for a bill that aims to establish centralized repositories for off-chain cryptocurrency transaction data. The Off-Chain Digital Commodity Transaction Reporting Act calls on crypto trading platforms to report all transactions to a repository registered with the Commodity Futures Trading Commission (CFTC).
Off-chain transactions typically do not appear on the blockchain, which means there is no network record of the financial details involved. This lack of transparency can make off-chain solutions more susceptible to hacking and data breaches.
Beyer argues that with the increasing use of trading platforms and the desire to expedite transactions and reduce costs, thousands of transactions occur off-chain daily without being recorded on the publicly viewable blockchain. His bill aims to address privacy concerns and restore confidence by promoting transparency in the crypto market.
“Unfortunately, internal record keeping among these private entities can vary wildly, and this can leave investors and consumers vulnerable to fraud and manipulation. This bill is a common-sense measure to restore some transparency and confidence to the digital asset market.”
Beyer hopes that by requiring off-chain transaction data to be stored in repositories accessible to regulators, incidents like the collapse of FTX can be prevented.
The Details of the Bill
The bill stipulates that each digital asset swap, whether cleared or uncleared, must be reported to a registered swap data repository. Furthermore, sales of digital commodities should also be reported to the crypto repository for transactions. Trading platforms are required to report every transaction immediately after execution.
Beyer explains that this legislation would enforce reporting of all off-chain digital asset transactions within 24 hours to a CFTC-registered trade repository, aligning it with existing requirements for securities and swaps transactions. In 2021, Beyer introduced the Digital Asset Market Structure and Investor Protection Act, which aims to safeguard consumers and foster innovation in the industry.
Hot Take: Addressing Privacy Concerns and Enhancing Transparency in Crypto
US Congressman Don Beyer is pushing for a bill that would establish centralized repositories for off-chain cryptocurrency transaction data. The Off-Chain Digital Commodity Transaction Reporting Act aims to promote transparency and restore confidence in the crypto market by requiring crypto trading platforms to report all transactions to a repository registered with the CFTC. By addressing privacy concerns associated with off-chain transactions, Beyer hopes to prevent incidents like the collapse of FTX. The bill mandates reporting of all digital asset swaps and sales of digital commodities to registered repositories, ensuring regulators have access to transaction data. This legislation aligns with Beyer’s previous efforts to protect consumers and promote innovation in the digital asset market.
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