A New Bill in the US Aims to Require Crypto Service Providers to Report Off-Chain Transactions
A new bill introduced by U.S. Representative Don Beyer, called the “Off-Chain Digital Commodity Transaction Reporting Act,” aims to mandate cryptocurrency service providers to report all blockchain transactions to a government repository registered with the Commodity Futures Trading Commission (CFTC). The purpose of this legislation is to protect crypto investors from potential disputes, manipulation, or fraud that may arise from off-chain transactions, which are transactions that occur outside of the blockchain network and are not instantly recorded. These off-chain transactions pose tracking challenges as they are processed through secondary layers.
Increasing Transparency and Confidence in the Crypto Market
The bill addresses concerns about inconsistent record-keeping practices among private entities operating trading platforms. By requiring crypto service providers to report all off-chain transactions within 24 hours to a CFTC-registered trade repository, the legislation aims to restore transparency and confidence in the digital asset market. These reporting requirements align with existing rules for securities and swaps transactions.
US Lawmakers’ Focus on Cryptocurrency Regulations
This new bill is part of a larger trend of increased scrutiny and regulation of cryptocurrencies by U.S. lawmakers. In September, nine senators supported Senator Elizabeth Warren’s Digital Asset Anti-Money Laundering Act, which targets noncustodial digital wallets and seeks to expand Bank Secrecy Act responsibilities to combat illicit use of digital currencies.
Hot Take: Enhancing Security and Accountability in Crypto Transactions
The introduction of the “Off-Chain Digital Commodity Transaction Reporting Act” reflects growing concerns around fraud and manipulation in the crypto market. By imposing reporting requirements on crypto service providers, the bill aims to enhance security, accountability, and investor protection. The legislation recognizes the need for transparency in off-chain transactions and seeks to establish a reliable repository for tracking these transactions. If passed, this bill could contribute to building trust and confidence in the cryptocurrency industry, paving the way for further regulatory measures that ensure the integrity of digital asset transactions.
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