More regulation on crypto developers, altcoins and exchanges

[_act_]

Bipartisan bill to give CFTC authority over exchanges and stablecoins

The Digital Commodity Exchange Act would give the commodities regulator the authority to determine rules for cryptocurrency developers and exchanges offering spot trading.

A bipartisan group of lawmakers in D.C. introduced an updated bill on April 28 to regulate cryptocurrency developers, dealers, exchanges, and stablecoin providers, bringing them under the regulatory control of the United States Commodity Futures Trading Commission (CFTC).

I am thinking this will be for altcoins and exchanges and not bitcoin. This will not go beyond cryptocurrency developers, dealers, exchanges and stablecoin providers that are in US but there are several of them there and other countries can follow if this is successfully done.

But I hope this will not affect bitcoin in any way.

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[franky1]

this is not about regulating all crypto software developers.. so lets not tin foil hat down that rabbit hole like some have in the past.

instead its about those who create a crypto that is 'stablecoin' backed by a commodity like gold.. whereby it needs to be regulated by the commodities authority(CFTC). instead of other crypto's which are asset based which are regulated by the SEC

anyone issuing an ICO for a commodity backed stable coin needs to register their involvement and how they designed their system to not be manipulated. in short how they intend to store/transport the real backed physical commodity and how to prove audit of that physical store/transport to then peg/associate it to the crypto contracts

also the commodity market is more temporary because at the end of the contract people need to take physical ownership of the actual physical commodity which then writes off the contract(coin/token) which then requires issuing new fresh coins/tokens/contracts to associate with the next season/quarterly/transport vessel of the next allotment of newly created raw material.. something blockchain technology doesnt want to deal with. so its not a  big thing blockchains would get involved in in the first place. its more for the 'smart contract/no-blockchain network types of 'coin'


its not about being a just a crypto developer.,, instead its about being a digital commodity certificate issuer(updated language: crypto commodity issuer)

[pooya87]

I am thinking this will be for altcoins and exchanges and not bitcoin. This will not go beyond cryptocurrency developers, dealers, exchanges and stablecoin providers that are in US but there are several of them there and other countries can follow if this is successfully done.

But I hope this will not affect bitcoin in any way.

This will affect ANYTHING that is centralized or has some traces of centralization. This means it could also affect parts of the bitcoin world. For example a bitcoin mining pool is still centralized and can be regulated (example: MARA pool). Or bitcoin.org website (example: removal of white paper for UK users only).

Obviously other things like stablecoins that are 100% centralized will be 100% affected by this. Same goes with centralized exchanges, centralized payment processors, centralized altcoins like ethereum/bcash/ripple/bnb/all tokens/...

I don't see how they can regulate development though since that is impossible in open source world

[Apocollapse]

Thanks to Bitcoin as being decentralized currency and Bisq as decentralized exchanges, it will not affected by this kind regulations. You can still use Bitcoin and you can buy/sell using Bisq by running through Tor network, no one can control you.

This is the reason why everyone need to understand decentralization and avoid any centralization at all cost!

[franky1]

Thanks to Bitcoin as being decentralized currency and Bisq as decentralized exchanges, it will not affected by this kind regulations. You can still use Bitcoin and you can buy/sell using Bisq by running through Tor network, no one can control you.

dont be so sure about that.

just because bisq offers a way to communicate to other traders without a central server does not mean you are then free of regulation.

if your BANK see's alot of wire transfers in-out for lots of random people unrelated to you. you will get flagged. there are many flags.
more then X amount per transfer
more then X amount per year

EG if they see totals of say $80k moving in-out of an account you will get treated as a money business. and doing this on a 'personal' account instead of a business account will get the bank to flag and suspend its service with you because you breach the terms and conditions of the personal bank account terms and conditions.
you will then be told to register as a business which then means register as a money service business with the authorities.. no matter what the product/asset/currency it is that is being traded opposite the fiat movements they have flagged

tor/bisq/altnets will not absolve you of the associated fiat wire transfers you do in a trade

in short. they wont catch you due to the inability to monitor/analyse the coin movements. but they will catch you on the fiat movement side.

the only way to solve this would be if there was a 'privacy' stable coin pegged to fiat where people trade crypto to crypto, and not involve real bank account fiat. whereby this 'privacy' stable coin becomes a market pair of the private DEX trading systems
but then . thats for the speculators of day traders. not the people that want actual fiat to actually then spend actual fiat in the real world.

and yea good luck making a privacy stable coin that can be trusted (lack of audit) with the new regulations in place that would require all fiat(sec)/commodity(cftc) backed stable coins to be auditable and verifiable..
and personally. id never like to use a currency that is not auditable. as the whole point of the trust of things like bitcoin is the auditability of the coin to ensure there is no fractional reserving or manipulation of the coin happening at the store of value level

[pooya87]

just because bisq offers a way to communicate to other traders without a central server does not mean you are then free of regulation.

Bisq is actually not 100% decentralized, there is still a centralized server that coordinates all the communication and also acts as a middle man in each trade and receives the commissions.
Technically if the government puts some pressure on them, they could technically pull the same shenanigan as Wasabi wallet pulled and start censoring certain transactions.

[NeuroticFish]

instead its about those who create a crypto that is 'stablecoin' backed by a commodity like gold.. whereby it needs to be regulated by the commodities authority(CFTC)

Stablecoin issuers do need proper regulation, since they're centralized and can do a big amount of harm (and distortion of the market too).
But will this affect out-of-USA entities? I kinda doubt it. And then the shady ones - no matter how big - will still continue operating. So I fear not much will change.

[BlackHatCoiner]

Bisq is actually not 100% decentralized, there is still a centralized server that coordinates all the communication and also acts as a middle man in each trade and receives the commissions.

I have never traded with Bisq, but this is what they say:

All Bisq data is transferred over its own secure peer-to-peer network, which is built on top of the Tor network—no central servers. This means there are no data honeypots, rendering large-scale hacks of customer information databases impossible.

Technically if the government puts some pressure on them, they could technically pull the same shenanigan as Wasabi wallet pulled and start censoring certain transactions.

But, Bisq isn't a company, like zkSNACKs that controls the most used coordinator. The developers can do nothing to stop, censor, control their users in the same way the bitcoin devs can't. They can only introduce malicious code to their next releases, which can be detected and ruin their reputation.

Second, there's no data saved in any server, and even if it was, messages are end-to-end encrypted:

Bisq does not know anything about traders who use its network, and no data is stored on who trades with whom.

Trade disputes are handled through a 3-tier mechanism that includes end-to-end encrypted trader chat, mediation, and arbitration.

It seems rather censorship-resistant.

[avikz]

Bipartisan bill to give CFTC authority over exchanges and stablecoins

The Digital Commodity Exchange Act would give the commodities regulator the authority to determine rules for cryptocurrency developers and exchanges offering spot trading.

A bipartisan group of lawmakers in D.C. introduced an updated bill on April 28 to regulate cryptocurrency developers, dealers, exchanges, and stablecoin providers, bringing them under the regulatory control of the United States Commodity Futures Trading Commission (CFTC).

I am thinking this will be for altcoins and exchanges and not bitcoin. This will not go beyond cryptocurrency developers, dealers, exchanges and stablecoin providers that are in US but there are several of them there and other countries can follow if this is successfully done.

But I hope this will not affect bitcoin in any way.

That shouldn't be bad! I think a global framework should be launched instead of country specific rules and regulations for regulating all types of crypto assets and related services.

Every single day multiple short lived cryptocurrencies are popping up in pancakeswap platform and gaining unrealistic amount in pricing before dying. This should stop at any cost. But such legislations should not affect bitcoin largely.

[pooya87]

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OK but could you explain to me how can they still receive trading fees equal to 1% of the volume if the trade takes place Peer-to-Peer and there is no middle man (their servers) involved?!
Obviously they also have to know what outputs are being spent and what outputs are being created, this doesn't look so end-to-end encrypted or decentralized to me at least no when their servers are involved.

[BlackHatCoiner]

OK but could you explain to me how can they still receive trading fees equal to 1% of the volume if the trade takes place Peer-to-Peer and there is no middle man (their servers) involved?!

From their introduction to DAO:

Contributors produce, creating BSQ

In the Bisq DAO, trading fees are collected from traders and distributed to contributors, but there is no central authority to do this. Here’s how it works: after a Bisq contributor does work, they file a compensation request in the DAO with a description of what they did and how much BSQ they want in return. Then, stakeholders (who are other contributors, traders, and anyone else with BSQ) vote for/against the request. If the request is approved, the contributor is issued new BSQ in the amount they requested and BSQ supply is increased.


Traders consume, burning BSQ

Then, a trader looking for lower trading fees can buy those BSQ tokens from a contributor. When they buy BSQ tokens for BTC, the contributor is paid for their work, and the value transfer from producer to consumer is complete! When a trader pays trading fees with BSQ, those BSQ tokens are burned or "decolored" and BSQ supply is decreased. This process of creating and destroying BSQ tokens enables a sort of monetary policy controlled by Bisq stakeholders and traders.

In this way, there is no need for a central entity to collect and distribute revenue: the BSQ token enables a transfer of value from producer to consumer without any single entity controlling any aspect of the decision-making or distribution process.

Pretty neat I'll say. This is a graphical overview:

[kryptqnick]

From what the article says, it's just stablecoins, and exchanges that allow spot trading of those. I actually think it's a good thing because it'll finally put some control over how backed USDT is, and what it's actually backed with. Perhaps this info won't be publicly available, but even if at least authorities will know, it's better than nothing. Overall, it seems it won't affect Bitcoin and most altcoins, apart from perhaps affecting some trading pairs because they include stablecoins. We'll see how it goes in practice, but I don't think it's anything bad.

[suzanne5223]

I am thinking this will be for altcoins and exchanges and not bitcoin.

Technically, yes. The government can not regulate every decentralized cryptocurrency and privacy coin but they will want to regulate the initial offering (crypto developers), CEX, and some stablecoin like USDT to prevent another market cap manipulation which was once done by the USDT team.

This will not go beyond cryptocurrency developers, dealers, exchanges and stablecoin providers that are in US but there are several of them there and other countries can follow if this is successfully done.

But I hope this will not affect bitcoin in any way.

Most countries where cryptocurrency is not banned have already followed this step ever since the institutional investors find safe haven in cryptocurrency.

[Gyfts]

As far as I'm concerned, stable coins are extraordinarily risky and whatever assets they claim to be supported by require that you trust them to maintain the value of those assets. I understand people have their reasons for using them, fine - one portion this bill seemingly would force stable coin providers to register as fixed-value digital commodity operators and that would force stable coin providers to have disclosure documents registered with the federal government which provide info on the assets backing the coin. Good. Stable coins are already centralized so it doesn't matter to me what type of regulation that would exist on a centralized stable coin. They're not "true" crypto currencies anyways.

[The Cryptovator]

I don't think this is for Bitcoin or decentralized altcoins. How a decentralized cryptocurrency would regulate? They can't prevent them from using or creating. Regulation sounds are for a centralized organization like an exchange and stable coins which they mentioned in the title. So it's impossible to impact Bitcoin, even if it won't affect decentralized altcoins.

[Husires]

As I understand it, the decision is related to stablecoins, which are linked to some assets to stabilize their value, such as USDT and others, and central platforms that provide services related to paper money or that are based in the United States.

• The reality of the altcoin market is full of scam, and if these currencies are centralized, they will not have a future.
• Crypto exchanges manipulate prices, gain from listing, pump coin and do a lot of shady things.

Regulation is a real test of the extent of decentralization of many of the services that claim to be decentralized.

[verita1]

In the United States we are seeing more cryptocurrency exchange platforms that are operating as well as dapps.
It is well known that there is an important movement of developers who are building to make the main capitals of the United States a boost for blockchain, bitcoin and cryptocurrencies.
So a law to regulate the use of altcoins, stablecoins that prevent any act of fraud will give American users security when investing in cryptocurrencies.

[TimeTeller]

In the United States we are seeing more cryptocurrency exchange platforms that are operating as well as dapps.
It is well known that there is an important movement of developers who are building to make the main capitals of the United States a boost for blockchain, bitcoin and cryptocurrencies.
So a law to regulate the use of altcoins, stablecoins that prevent any act of fraud will give American users security when investing in cryptocurrencies.

And also, we are already heading in that direction. The government just want to protect those individuals who will be in this market.
Just take for example, who will audit these stable coin platforms, if not the government?
If you are legit and claiming that you have the actual assets pegged to a stable coin, you won't be afraid of the government regulations.
Because for me, this will give security to newcomers, who are new and no idea how scammers work in crypto.
At least with the intervention of the government, they are quite protected. And then, they can move on to other alts once they got a good grasp of the market.

[marine4u]

I don't think this is for Bitcoin or decentralized altcoins. How a decentralized cryptocurrency would regulate? They can't prevent them from using or creating. Regulation sounds are for a centralized organization like an exchange and stable coins which they mentioned in the title. So it's impossible to impact Bitcoin, even if it won't affect decentralized altcoins.

Decentralization is the way to keep your money.  I also do not think the US government's regulation of this law is clear or not, but I will not endorse the eternal actions of governments.  They admit bitcoin is superior and they will have to continue to enforce regulations to increase price pressure on bitcoin and ceypto.  Decentralization will also have scalable stablecoins, loans where bitcoin is collateral… I believe bitcoin's long-term will be better.

[Dave1]

In the United States we are seeing more cryptocurrency exchange platforms that are operating as well as dapps.
It is well known that there is an important movement of developers who are building to make the main capitals of the United States a boost for blockchain, bitcoin and cryptocurrencies.
So a law to regulate the use of altcoins, stablecoins that prevent any act of fraud will give American users security when investing in cryptocurrencies.

And also, we are already heading in that direction. The government just want to protect those individuals who will be in this market.
Just take for example, who will audit these stable coin platforms, if not the government?
If you are legit and claiming that you have the actual assets pegged to a stable coin, you won't be afraid of the government regulations.
Because for me, this will give security to newcomers, who are new and no idea how scammers work in crypto.
At least with the intervention of the government, they are quite protected. And then, they can move on to other alts once they got a good grasp of the market.

Well that's what their excuses on going after exchanges that doesn't have KYC or not enforcing it. And projects that are scamming people, government wanted to protect the consumer as they are mandated by law.

I guess this is not new, again this started in 2017 wherein CFTC suddenly started this whole crusade against everything related to crypto and this continue up to this day.