In response to the U.S. CFTC’s draft crypto regulation being uploaded to GitHub, SBF stated that the core goal of the bill is to regulate centralized crypto venues.
A centralized entity like FTX may be required to have disclosures, some kind of possible customer suitability testing, etc. It is very important that this is done in a fair manner.
How regulated centralized entities interact with DeFi
In particular, it does not state what DeFi developers, smart contracts and validators must do. It is looking to eventually establish guidelines such as how FTX’s platform (or Fidelity’s platform) will interact with DeFi contracts. That’s right, and the infrastructure bill got it wrong not too long ago: developers and validators are not platforms and shouldn’t be regulated. This is a huge improvement.
For sanctions, the SBF said that validators and smart contracts need to be free, permissionless and decentralized, and we should have tools to make screening easier and faster. SBF believes regulation will get better and clearer and create a path for cryptocurrencies to make a comeback.
But we have to see the final version again, SBF said; he only supports the correct version.
Previously, a new draft of the U.S. Commodity Futures Trading Commission (CFTC) Digital Commodities Consumer Protection Act (DCCPA), which regulates the crypto industry, has been uploaded to GitHub. The draft shows that software developers would not be considered digital commodity brokers. Being classified as a broker will have specific tax reporting requirements, which cannot be done without software developers centrally managing their platforms. Brokers were defined broadly in previous bills to include node operators and wallet makers, which the bill explicitly excluded.
Additionally, the draft shows that the CFTC is required to provide a report on the size and protocols of the DeFi market within 180 days of the bill’s enactment. It would also order the CFTC to liaise with foreign regulators to ensure U.S. rules are harmonized with international regulations.