Messari CEO Ryan Selkis has praised a newly proposed Republican crypto bill, commenting it is a “10x improvement” on all other crypto bills introduced to the United States Congress so far.
The “Digital Asset Market Structure” (DAMS) bill, introduced on June 1, proposes to establish a framework to fill the gaps in the regulatory process between the U.S. Commodity Futures Trading Commission (CFTC) and Securities Exchange Commission (SEC) on activities related to crypto-assets.
Speaking at a Coinbase-hosted event on Twitter Spaces on June 7, Selkis explained that U.S. Representatives Patrick McHenry and Glenn Thompson have drafted a pathway for tokens to reach compliance through decentralization without instantly triggering securities laws.
— Coinbase ️ (@coinbase) June 7, 2023
“How could tokens in their earliest stage come into compliance with securities laws on a temporary basis unless and until they were sufficiently decentralized?” Selkis asked rhetorically.
He went on to acknowledge the former work of U.S. Securities Exchange Commission (SEC) Chair Hester Pierce, who released a “Safe Harbor” proposal in February, 2020.
“A lot of the language that she had included in those proposals is now being worked out in legislative text [and] that’s kind of made its way into this new bill.” He added:
“I do think that this is probably a 10x improvement versus anything that we’ve seen so far.”
The last similar crypto bill to hit the floor of Congress was the Digital Commodities Consumer Protection Act (DCCPA), which was introduced on August 3 to provide further supervision over the crypto industry following the collapse of FTX.
The Messari CEO’s comments were backed by TuongVy Le, head of regulatory and policy at Bain Capital Crypto, who added that DAMS finally gives token issuers “a path to compliance.”
“The issue that a lot of crypto issuers or token projects face is when you’re launching a token, you don’t become decentralized right away, right?” said Le.
Great to be on today with @iampaulgrewal @JBSDC @twobitidiot! @coinbase thanks for having me. There’s a lot going on right now, but we are fighting for progress and innovation and something better than the status quo. And we will get there! – onward! https://t.co/oHGhh6wssP
— TuongVy Le ️ (@TuongvyLe12) June 7, 2023
She explained that token issuers “need time to work towards that,” but while that’s in the works, the SEC can swoop in and “bring enforcement action against you.”
While Le considered this to have always been the “fundamental problem,” she remains hopeful that DAMS can resolve it once and for all:
“I think this bill addresses that. It gives token issuers a path to get there […] in a really thoughtful way.”
Paul Grewal, the chief legal officer at Coinbase also acknowledged the problems that many token issuers are tackling:
“Under the current law there really is no reasonable pathway for those assets that start out life as a security to evolve and involve in large part by decentralizing in a way that’s recognized under the law.”
While there are many details to be ironed out, the Digital Asset Market Structure Discussion Draft is a strong step towards developing a regulatory regime that embraces innovation, maintains US industry presence and protects consumers.
— paulgrewal.eth (@iampaulgrewal) June 5, 2023
Related: Crypto lawyers flame Gensler over claims that all crypto are securities
The bill was discussed in light of the SEC’s recent spate of lawsuits filed against the two largest cryptocurrency exchanges Binance on June 5 and Coinbase on June 6 for allegedly breaking securities laws by offering tokens as unregistered securities.
The SEC now considers at least 67 cryptocurrencies to be classed as securities.
Among the most notable tokens the financial regulator deems to be securities are Binance Coin (BNB), Solana (SOL), Cardano (ADA), Polygon (MATIC) and Cosmos (ATOM).
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