The bill was presented at night and has not been distributed at this point; however, it is now creating a ruckus. Crypto Twitter considers it a "nonstarter."
US Sen. Jack Reed supported a bipartisan bill brought into the Senate on July 18 that would fix Know Your Client (KYC) and Hostile to Tax Evasion (AML) guidelines and authorization necessities for decentralized finance (DeFi). As indicated by a news release on Reed's site, the bill is named the Crypto-Resource Public Safety Upgrade and Requirement (CANSEE) Act.
The bill would expose DeFi tasks to similar prerequisites as "other monetary organizations, including unified crypto exchanging stages, gambling clubs, and even pawn shops." The bill would make "anybody who controls that venture" responsible for the utilization of the DeFi administration by authorized people. Moreover:.
“If nobody controls a DeFi service, then — as a backstop — anyone who invests more than $25 million in developing the project will be responsible for these obligations.”
The bill would likewise "modernize" Depository Division AML powers by broadening them beyond the customary monetary framework. As per the assertion:
“As new technologies like cryptocurrency increasingly enable new ways to conduct financial transactions, it is critical to extend Treasury’s authority to crack down on illicit financial activity that may occur outside the banking sector.”
The bill likewise sets new prerequisites for administrators of crypto booths (or ATMs) to forestall their utilization in illegal tax avoidance. Booth administrators would be expected to confirm the personalities of both counterparties in an exchange.
The bill had not been distributed at the time of this writing. An individual from Reed's staff reached by Cointelegraph couldn't say when the bill would be distributed. A text implying that it is the draft bill has been posted on GitHub.
Crypto Twitter has wasted no time in denouncing the bill. One analyst referred to it as "an existential danger to DeFi" and a "nonstarter." That's what one more said: "Forcing control liability regarding a $25 million venture will chill VC interest in DeFi because latent tokenholding doesn't rise to control."
The Crypto Chamber for Development said in an explanation, "The proposition neglects to offer genuine direction on specialized ways for decentralized conventions to consent to BSA [Bank Mystery Act] revealing prerequisites." That association leans toward a methodology that "requires recognizing different components inside the DeFi innovation stack. It additionally includes utilizing the straightforwardness and programmability innate in blockchain frameworks to determine proper consistency estimates remarkable to the crypto biological system."
Amy James, pioneer behind industry advocate Web3 Working Gathering, told Cointelegraph, "Unfortunately, the US is turning out to be less and less strong in web3 advancement. Albeit some contend any measure of administrative lucidity is a success, it should be correct, or it's anything but a drawn-out win. We laud these lawmakers for making an endeavor to give administrative clarity, and we desire to see them change parts of this bill in light of industry criticism to make the US a drawn-out serious market in web3."
Sens. Mike Rounds, Imprint Warner, and Glove Romney are cosponsors of the bill. Reed and Warner were cosponsors of a bill presented by Sen. Elizabeth Warren, the Advanced Resource Authorizations Consistence Upgrade Act, in Walk 2022.
(DEREK ANDERSEN, CoinTelegraph, 2023)