The leak of information about what is happening in US regulatory circles. If it does lead to more clarity in the cryptocurrency world, it could also support a healthier market, at least according to some commentators.
However, this should be taken very seriously, since we are talking about a leak that occurred through an anonymous account, although it was picked up by several newspapers. Many commentators are already analyzing this document, which thus appears to be authentic, at least for the community. Given the importance of the US market for both Bitcoin and the rest of the industry, it’s worth taking the time to analyze what might happen.
Regulation of cryptocurrencies in the USA: restrictions
The rules are restrictive, most of them have not yet been spelled out
What is this document?
It will still be a project, and therefore it will have to go through a lengthy legislative process in the US. However, it will be subjected to an equally lengthy discussion in Congress, which may change its essence, or even reject it altogether. Therefore, before proceeding to what is contained in the document, we must proceed from the following: we are dealing with a document that does not yet exist. In any case, this does not mean that it is in the final version.
The most important points
In our opinion, there are several of them, and we will analyze them one by one, taking into account both the market context in which they will work and the actual impact they will have on projects, both financial and operational.
In fact, the main sector that could suffer and be forced to comply with much more restrictive laws would be decentralized finance (DeFi). The text contains several innovations concerning the working methods of projects of this type.
The code will be at the center of the ToS, or Terms of Service, that users must accept in order to use any kind of online service. On first reading, it seems obvious that users will have to get approval of the new ToS with every, even minimal, code change.
- AMM by the same rules as exchanges?
In fact, there is no clarity on this issue, since it is unclear whether automated and decentralized exchanges should really be subject to the same registration rules in the United States that apply to classic exchanges. If this is the case, then it is obvious that it will be very difficult for this type of business to work in the USA. And a project that will not be able to work in the United States will greatly reduce its sphere of influence.
- Ensuring profitability is a financial security
This is perhaps the most controversial point that will cause the most heated discussions after the publication of the draft. Apparently, it is assumed that all cryptocurrencies that can offer periodic, even non-fixed income, will be considered financial securities. This means that many tokens offering staking will be considered as such and potentially fall under the jurisdiction of the SEC.
- What will change for stablecoins and exchanges
Other changes, assuming that the bill will be presented in this form, and then really adopted with the cornerstones included in it, concern both stable coins and exchanges. Companies issuing stablecoins will have to register in the United States, although it is unclear on what conditions.
This will give advantages to USDC and Tether, which certainly have sufficient size to maintain American offices and legal groups. However, this will be a problem for those stable coins with a low market value that may find such an operation unprofitable.
Everyone who is also engaged in cryptocurrencies, that is, offers an exchange infrastructure, will have to register as such in a special registry. From the wording, that is, from the way the section is written, it is not yet clear whether this will apply to AMMS such as Uniswap or PancakeSwap, or they will remain on the sidelines. I would like to exclude AMM from such considerations, but we’ll see.
Also interesting is Article 3A, which prohibits exchanges from listing tokens that can be easily manipulated, whatever that means. Although, what does it mean?
- Anonymity of the founders? Never again
Another change will be aimed at anonymity of the founders and project managers, which is actually very common in the world of cryptocurrencies and concerns not only Bitcoin. This is quite understandable, because if you look at the projects on Coinmarketrate.com then you will see that anonymity is considered the basis for many projects.
Do you think it’s good? Little good. Let’s see what the real implementation of such rules will be, which can really change the approach to the work of the cryptocurrency market and new projects.
- DAOs will also have to register
DAOs, decentralized organizations, will have to register in the US, since in this case they will also have to answer personally as participants for tax purposes.
This is also an innovation that we, in general, expected, and which will not change the crypto landscape much, at least in our opinion, for most users. This, at least, taking into account what we will say in a minute, that is, the true state of this law and the possibility of its adoption in its current form.
Will it really come into force in its current form?
The legislative process in the USA will also require the intervention of interested groups and experts, who must help the legislator to smooth out the corners and clarify the points that must be taken into account if we want to effectively offer clarity to the market.
It will take some time before the bill is approved and the law will also be amended.
This is a bipartisan law, which means that it was created jointly by both parties dominating the US political scene. This does not mean that it will necessarily be adopted in this way, but…
This is certainly a good starting point for those who want it to be accepted.
There are two questions that will need to be analyzed: what might be the consequences of this law outside the United States, and to what extent such implantation can set the standard in other states.
The death of cryptocurrencies? Absolutely not, and we will also see that many will point out that Bitcoin has, in fact, been pardoned by this round of crypto laws.