New Bill in the US Aims to Regulate Cryptocurrency Transactions and Increase Investor Protection

A new bill introduced by US Representative Don Beyer seeks to require cryptocurrency service providers to report all blockchain transactions to a government repository. The "Off-Chain Digital Commodity Transaction Reporting Act" aims to protect cryptocurrency investors from disputes, manipulation, or fraud that may arise from off-chain transactions or transactions that occur beyond the blockchain network.

Bringing Transparency and Confidence to the Digital Asset Market

In an effort to address concerns over the transparency and accountability of off-chain crypto transactions, the bill would oblige trading platforms to report all transactions to a repository registered with the Commodity Futures Trading Commission (CFTC). It aims to mitigate potential risks by ensuring that all off-chain transactions are promptly logged and recorded.

This move comes as thousands of transactions are now taking place off-chain, bypassing the publicly viewable blockchain, in order to improve transaction times and lower costs.

Representative Don Beyer highlighted the need for greater transparency and accountability in the digital asset market. He emphasized that internal record-keeping practices among private entities can vary significantly, leaving investors and consumers vulnerable to fraud and manipulation.

By requiring crypto service providers to report all off-chain transactions within 24 hours to a CFTC-registered trade repository, this bill aims to restore transparency and instill confidence in the market. The requirements are said to be similar to those imposed on virtually all securities and swaps transactions.

Increasing Regulatory Focus

The introduction of this bill reflects the broader regulatory focus on cryptocurrency in the United States. In September, nine US senators lent their support to Senator Elizabeth Warren's Digital Asset Anti-Money Laundering Act.

The current legislation aims to crack down on noncustodial digital wallets and extend the Bank Secrecy Act's responsibilities to combat the illicit use of digital money.

With regulatory measures being proposed and implemented, it appears that lawmakers in the US are determined to protect investors and consumers while addressing potential risks associated with digital assets.