May 29, 2024
vOff-Chain Digital Commodity Transaction Reporting Bill in the US
Latest Cryptocurrency News

New U.S. Bill Proposes Mandatory Reporting of Cryptocurrency Transactions

In the United States, a fresh bill has been introduced with the goal of mandating cryptocurrency service providers to report all blockchain transactions to a government repository.

U.S. Representative Don Beyer unveiled the Off-Chain Digital Commodity Transaction Reporting Act on September 28. This legislation compels trading platforms to report all transactions to a repository registered with the Commodity Futures Trading Commission (CFTC).

The primary objective of this new law is to safeguard cryptocurrency investors from potential disputes, manipulation, or fraud originating from transactions conducted off-chain or beyond the blockchain network. Off-chain crypto transactions differ from on-chain ones as they are not instantly recorded on a blockchain but instead undergo processing via secondary layers, which makes tracking them somewhat challenging.

The announcement emphasizes that due to the rise of trading platforms and the desire to enhance transaction speed and reduce costs, a substantial number of transactions occur “off-chain” and remain unregistered on the publicly accessible blockchain.

Representative Beyer, in support of the bill, remarked, “Unfortunately, internal record-keeping practices among these private entities can greatly vary, leaving investors and consumers susceptible to fraud and manipulation. This bill represents a sensible step to reintroduce transparency and confidence into the digital asset market.”

As per the provisions of the bill, cryptocurrency service providers will be obligated to report all off-chain transactions to a CFTC-registered trade repository within a 24-hour timeframe. It is noted that these requirements align with the regulations governing “virtually all securities and swaps transactions.”

Recent times have seen a heightened focus by U.S. lawmakers on cryptocurrency regulations. In mid-September, nine U.S. senators voiced their support for Senator Elizabeth Warren’s Digital Asset Anti-Money Laundering Act. Reintroduced in July 2023, this legislation, in its current form, aims to crack down on noncustodial digital wallets and expand the responsibilities outlined in the Bank Secrecy Act to combat the illicit use of digital currencies, among other legal measures.

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