House Digital Commodities Bill a Threat to DeFi
The latest draft of the bipartisan Stabenow-Boozman Digital Commodities Consumer Protection Act currently in Congress was leaked and crypto attorney Gabriel Shapiro uploaded it to GitHub.
The reaction so far is it’s not going to be good for decentralization.
The draft includes definitions for digital commodities, brokers, custodians, dealers and platforms, as well as a number of new rules and requirements for the digital asset world. Notably it doesn’t address developers and engineers in its scope.
“I have long been a believer in transparency and open discussion of the future of cryptolaw,” Shapiro tweeted. “Accordingly, I have obtained a copy of a draft of the notorious DCCPA circulating secretly in D.C. and am hereby making it available to the public. https://t.co/JdyomquQi6”
While there’s almost no chance the measure will go to the floor for a vote before the midterms, it could be taken up in the 2023 Congressional session.
The bipartisan bill was introduced by Sens. Debbie Stabenow (D-MI) and John Boozman (R-AR) in August. Their legislation clarifies that bitcoin and ether are to be classified as commodities, as opposed to securities that come under the ambit of the Securities and Exchange Commission — implying that the Commodity Futures Trading Commission (CFTC) would have exclusive jurisdiction over them.
FTX CEO Sam Bankman-Fried has expressed support for the framework, saying he was excited to see a “strong bill” that addresses customer protection in crypto.
Even so, Bankman-Fried, chief of a centralized crypto exchange, has been criticized for supporting a bill that appears to threaten decentralized protocols.
On the critical side of the debate, Web3 startup accelerator Alliance DAO disparaged the DCCPA bill, saying it forces human intermediation and compels projects to sacrifice decentralization.
The DAO reckons the bill does not clarify what a digital commodity is, or make clear the distinction between tokens that are commodities and those that aren’t.