The newly circulating draft crypto bill can be a boon for the crypto market

Gabriel Shapiro shared the bill as he claims to support transparency and open discussion

Published: Oct 20, 2022 05:33:58 PM IST

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A new version of the Digital Commodities Consumer Protection Act (DCCPA) law has begun to circulate online, and some analysis suggests it might be advantageous for crypto and decentralised finance (DeFi).

An earlier draft of the legislation received harsh criticism from organisations that represent the industry because it had an overly wide definition of a 'digital commodity platform,' which 'could be interpreted as a ban on decentralised finance (DeFi).'

The general counsel of Delphi Labs, Gabriel Shapiro, recently shared a 31-page draft bill he made public because he supports 'transparency and open discussion.'

Shapiro commented on a provision that changed the definition of a 'digital commodities trading facility' and excluded people who write or distribute software, saying that it 'could be a boon' to DeFi and crypto.

"Notably, this version contains a limited exception to the term "digital commodity trading facility," which would exclude persons who solely develop or publish software--this could be a boon to DeFi/crypto," he further added.

The newly disclosed draft appears to follow comparable restrictions in the European Union and the United Kingdom, according to Martin Hiesboeck, head of research at the crypto exchange UpHold, who tweeted that the United States is 'finally getting their act together.'

"First impression: leaked #CFTC Bill seems to follow UK/EU reg in broad strokes even though it uses similar, somewhat different terminology. Will prepare a detailed report by tomorrow. US finally getting their act together. All good," said Dr Martin.

The remarks represent a shift in emphasis from the earlier iteration of the bill, which Web3 incubator and advocacy group Alliance DAO claimed: 'kills DeFi.'

The decentralised autonomous organisation (DAO) claimed that because the bill required people to enforce compliance with the rules, it 'creates a compliance architecture that precludes the concept of a system of smart contracts operating decentralised infrastructure with little or no reliance on human activity.'

There have long been requests for the US Congress to establish laws defining commodities and providing the CFTC authority to provide regulatory certainty surrounding digital assets in the country.

The DCCPA, which was first announced in August, tries to identify some crypto assets, such as Bitcoin (BTC) and Ether (ETH), as commodities rather than securities and extends the Commodities Future Trading Commission's (CFTC's) regulatory authority over the crypto industry.

Shashank is founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist.