Regulation
Is the US Bullish on DeFi? Almost, says the industry expert – DL News
- The FIT21 crypto bill establishes new definitions for digital assets.
- The criteria determine whether an asset is regulated as a security or a commodity.
- It’s a relief for the industry, but it also brings complications.
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Ever since the House passed FIT21, a bipartisan bill that could reshape US cryptocurrencies, industry experts have been on a victory tour.
But let’s make one thing clear: the bill is far from becoming law. Political observers say the chances of it passing the U.S. Senate are slim.
He also received harsh words from the White House, Securities and Exchange Commission Chairman Gary Gensler and a barrage of lawmakers.
But after years of regulatory and corporate battles, the crypto community considers it a victory.
Especially the builders behind decentralized platforms, who often fall through the cracks of existing legal frameworks.
According to FIT21, sufficiently decentralized digital assets would qualify as commodities. One of the criteria is that issuers or so-called affiliated persons cannot hold more than 20% of the token and voting power for a project.
Centralized tokens that do not meet this condition would qualify as securities. As such, they would fall under the purview of the SEC (while decentralized tokens would be regulated by the Commodity Futures Trading Commission).
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Is this clear enough for the cryptocurrency industry?
Almost, says Rashan Colbert, head of policy at decentralized trading platform dYdX Trading.
“It may be difficult for people to reach different decentralization thresholds and this back and forth movement between the two regulators will likely be extremely cumbersome in practice,” he said. DL News.
The CFTC regulating the spot commodity market is also unusual, Colbert added.
However, it is a big step, especially for DeFi projects.
“The bill provides a greater level of comfort knowing that we have the explicit authority to continue doing what we are doing, which is really all we want right now,” he said.
Contact the author at inbar@dlnews.com.