- The proposed DCCPA bill has sparked debate in the crypto space
- The bill would allow the CFTC to regulate spot markets along with defining certain groups
- Opponents say it will stifle startups and favours centralisation
Opposition to the Digital Commodities Consumer Protection Act (DCCPA), a bill proposed to the U.S. Congress, has seen increased opposition since it was uploaded to Github by crypto attorney Gabriel Shapiro. The act has been dubbed the ‘DeFi Killer’ by those who believe it will force projects to sacrifice decentralisation and gives authorities undue rights over protocols that were designed to work autonomously. One recent opponent, Alliance DAO, said last week that it will “kill startups” in the crypto space, although others believe it will actually help DeFi establish itself.
DCCPA Aims to Regulate DeFi
Shapiro obtained a copy of a draft of the “notorious DCCPA circulating secretly in D.C.” and posted it to Github for people to pore over. The latest draft appears to soften language perceived to be detrimental to DeFi, laying out what constitutes digital commodities, brokers, custodians, dealers and platforms. It also states rules and the core principles that apply to players in the digital commodities sphere.
Shapiro noted that the draft excludes those who develop or publish software from being included in the term “digital commodity trading facility”, which he said could be beneficial to the crypto industry by protecting software engineers.
FTX founder Sam Bankman-Fried is also in favour of the DCCPA, tweeting his support last week:
2) I’m optimistic that the Stabenow-Boozman’s bill will provide customer protection on centralized crypto exchanges without endangering the existence of software, blockchains, validators, DeFi, etc.
If I were convinced I was wrong about that, I would not support it.
— SBF (@SBF_FTX) October 19, 2022
Bill Would “Kill Startups”
However, opponents say that the bill forces human involvement and sacrifices decentralisation. Web 3.0 accelerator Alliance DAO for example announced last week that it was opposing the DCCPA, arguing that the CFTC has never regulated a spot market before and that it “does nothing to clearly define what a “digital commodity” is or clarify the distinction between tokens that are commodities and tokens that are not.”
The DCCPA will likely go through more iterations before it gets to the next stage, so hopefully some common ground can be found along the way.
