Previous bills integrated node operators and wallet producers as digital commodity brokers, but the new one is detrimental to decentralized DeFi developers. Samuel Richard Chen from crypto investment fund 1 Confirmation believes the DCCPA will allow the CFTC to kill the DeFi market and benefit CEX.
In early 2022, the US Senate approved a bill enabling the Commodity Futures Trading Commission (CFTC) to supervise the crypto market. However, the crypto community has criticized it for its provisions against developers of decentralized finance (DeFi) apps.
The legislators work on a copy of the Digital Commodities Consumer Protection Act (DCCPA), which outlines how the CFTC must regulate the market. Although that law is only a draft, many sources indicate that they have passed it on internally.
Gabriel Shapiro, the senior advisor of Delphi Labs, posted the sketch to show the crypto community an overview of upcoming regulatory frameworks.
The blockchain attorney said he believes that transparency and open dialogue are essential to cryptocurrency legislation. That led him to post the DCCPA draft, previously circulating among the authorities, for the public to see.
The New Draft Law Affects the Local DeFi Community
The local crypto community receives heavy criticism, as that bill does not consider software program developers as cryptocurrency intermediaries.
DeFi developers must report their taxes to the fiscal authorities as digital commodity brokers. There will be no legal certainty if they operate independently without having a standard centralized company.
Contrary to the current bill, previous ones integrated node operators and wallet producers as digital commodity brokers. In other words, the draft law is detrimental to decentralized DeFi and web3 developers, as it will not understand them.
If the DCCPA receives approval, the CFTC must publish a report on the size of the market and the DeFi protocol within six months. The regulatory agency may also work with legislators abroad to prevent the US law from compromising the international image.
The CEO of FTX Receives Criticism for Supporting the DCCPA
Although independent DeFi developers disagree with the CFTC bill, Samuel Bankman-Fried, the CEO of FTX, considers it helpful for CEX exchanges. He said he is optimistic that the DCCPA will help protect Cryptocurrency exchange users without risking software, blockchains, validators, or DeFi.
However, he promised to change his position by not supporting the DCCPA if anyone could prove him wrong. Richard Chen from crypto investment fund 1 Confirmation believes that the DCCPA will allow the CFTC to kill the DeFi market.
Bankman-Fried also made offensive statements when outlining the legal roadmap for the crypto market, which benefits CEX.
The above draft is receiving much criticism from the local DeFi community and many supporters of decentralized cryptocurrencies. Analysts recommend that the CFTC modify the bill, as there are also many unreasonable factors.
Meanwhile, Bitcoin is trading at around USD 19,145 and has accumulated a 0.4% loss over the last 24 hours. While its daily trading volume is above USD 23.18 billion, its market capitalization is about USD 367.40 billion, according to CoinGecko.
By Alexander Salazar
