‘Secretly Circulating’ Draft Crypto Bill May Be a ‘Blessing’ for DeFi

by Arthur · October 19, 2022

A new draft of the Digital Commodities Consumer Protection Act (DCCPA) bill has started circulating online, with some comments suggesting it could be positive for decentralized finance (DeFi) and crypto.

An earlier draft of the bill received strong criticism from industry representative bodies for containing too broad a definition for a “digital goods platform”, which “could be interpreted as a ban on decentralized finance (DeFi).”

In a newly posted 31-page bill shared by Delphi Labs general counsel Gabriel Shapiro, the attorney said he made the bill publicly available because he believes in “transparency and open discussion.”

Shapiro noted a section that changed the meaning of a “digital commodity trading facility” that excluded people who develop or publish software, commenting that it “could be a boon” for DeFi and crypto.

In particular, this version contains a limited exception to the term “digital commodity trading facility” which will exclude people who solely develop or publish software – this could be a boon for DeFi/crypto. pic.twitter.com/0pa843RJ9h

— _gabrielShapir0 (@lex_node) 19 October 2022

Dr. Martin Hiesboeck, head of research at the crypto exchange UpHold tweeted that the recently released draft appears to follow similar rules in the EU and the UK, suggesting that the US is “finally getting its act together”.

First impression: leaked #CFTC Bill appears to broadly follow UK/EU reg, although it uses similar somewhat different terminology. Will prepare a detailed report tomorrow. The US has finally got its act together. Totally fine.

— Dr Martin Hiesboeck (@MHiesboeck) 19 October 2022

The comments are a change in tone from the previous version of the bill, which was described by the Web3 incubator and advocacy group Alliance DAO as one that “kills DeFi.”

The Decentralized Autonomous Organization (DAO) wrote the bill “creates a compliance architecture that precludes the concept of a system of smart contracts that operate decentralized infrastructure with little or no reliance on human activity,” as it required people to enforce regulatory compliance.

Related: ‘Time is not on our side’ to provide regulatory clarity on crypto – US lawmaker

There have long been calls for regulatory clarity regarding digital assets in the US, and some have called on the US Congress to pass legislation defining commodities and giving jurisdiction to the CFTC.

First introduced in August, the DCCPA expands the regulatory power of the Commodities Future Trading Commission (CFTC) on the cryptocurrency industry and seeks to define certain cryptos, such as Bitcoin (BTC) and Ether (ETH) as commodities instead of securities.