A bill aimed at regulating the cryptocurrency industry in the US had been tabled this week which would, if enacted, represent the largest shakeup of the fledgling industry to date. The Crypto-currency Act of 2020, which was tabled by Representative Paul Gosar of Arizona on Monday, was written in collaboration with high profile crypto supporters who are seeking clarification on numerous aspects of the ecosystem while also trying to ensure that it adheres to existing laws surrounding financial products.
The Crypto-currency Act of 2020 was written in collaboration with Marshall Hayner of Metal Pay and Erik Finman, a Bitcoin millionaire who currently runs an investment fund, and seeks to both define different types of digital assets and clarify which federal agencies will oversee them.
According to the bill, digital assets will be split into three categories and will be overseen by three agencies:
- Crypto-currencies – Financial Crimes Enforcement Network (FinCEN)
- Crypto-commodities – Commodity Futures Trading Commission (CTFC)
- Crypto-securities – Securities and Exchange Commission (SEC)
The bill goes on to describe exactly how these agencies will differentiate and categorize each cryptocurrency before calling on FinCEN, or more accurately the Secretary of the Treasury him or herself, to issue rules requiring each cryptocurrency to allow tracing of transactions on their blockchains and the identities of those individuals and companies doing so.
While this approach is in line with existing financial rules and regulations, and is likely to be in line with what the current Secretary of the Treasury Steve Mnuchin has up his sleeve when he talked of “significant” changes to how crypto is treated by authorities in February it would nevertheless represent a huge undertaking and would leave privacy advocates seething.
Bill Comes in for Criticism
The bill first came to light in December and follows the filing of the Token Taxonomy bill last year. It was instantly criticized for its overreach, criticism that has resurfaced with its official filing:
Yesterday Rep. Paul Gosar introduced a crypto-focused bill that’s been getting some attention. Here’s a short thread with my thoughts on it. TLDR: It’s not a serious bill and has almost zero chance of moving, but should be opposed on principle.
— Jerry Brito (@jerrybrito) March 10, 2020
Even if the Crypto-currency Act of 2020 has little chance of success in its current form, at least both it and the Token Taxonomy bill, which will likely suffer a similar fate, are bringing the subject of cryptocurrency regulations to the table and forcing regulators and lawmakers to at least engage on the subject rather than burying their heads in the sand.