U.S. Rep. Don Beyer, a Democrat from Virginia, is spearheading legislation to bring transparency to off-chain crypto transactions. The proposed bill seeks to compel major crypto exchanges to share their internal transaction data with centralized repositories. This move is designed to allow regulatory bodies like the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) to have oversight of digital asset movements that are currently only recorded on private ledgers within exchanges.
The bill’s objective: Investor protection and fraud prevention
The legislation comes as a response to the growing concern that internal record-keeping by private crypto entities can be inconsistent. This lack of uniformity, according to Beyer, exposes investors and consumers to potential fraud and manipulation. Moreover, the bill aims to prevent catastrophic events like an FTX collapse by ensuring that exchanges report their internal flow of digital assets to an external repository accessible to U.S. regulators. The proposed law would cover a wide range of digital commodities, assets, and collectibles.
The bill’s framework is somewhat reminiscent of the Dodd-Frank Act of 2010, which mandated centralized reporting for swaps trading information in the wake of the financial crisis. Beyer, who serves as the top House Democrat on the Joint Economic Committee, believes that as consumers increasingly use large digital asset trading platforms, the need for transparent record-keeping becomes ever more critical.
Political roadblocks and ongoing discussions
However, the bill faces significant political hurdles. Currently, the House is controlled by Republicans who have their own crypto agenda and have shown a willingness to move forward without bipartisan support. Additionally, Beyer’s office has reached out to the Senate, which has so far been unreceptive to major crypto legislation in this session.
Despite these challenges, Beyer remains optimistic. He has been in talks with Republicans to integrate his proposal into their market-structure bill, which is already in motion. Beyer’s office is also exploring avenues for collaboration with the Senate, although progress on that front appears to be slow.
Whether or not the bill gains the bipartisan support it needs to move forward remains to be seen, but its introduction is part of the ongoing dialogue about crypto regulation in the United States.
