A new bill in the United States seeks to require cryptocurrency service providers to report all blockchain transactions to a government repository.
On September 28, U.S. Representative Don Beyer introduce The Off-Chain Digital Commodities Transaction Reporting Act requires trading platforms to report all transactions to a repository registered with the Commodity Futures Trading Commission.
new legislation Target Protect cryptocurrency investors from disputes, manipulation or fraud that may arise from off-chain transactions, or transactions that occur outside the blockchain network. Unlike on-chain transactions, off-chain crypto transactions are not immediately recorded on the blockchain but are processed through secondary layers, thus creating some difficulties in tracking.
The announcement noted that with the advent of trading platforms and the desire to increase transaction times and reduce costs, thousands of transactions occur “off-chain” and are not recorded on the publicly visible blockchain.
“Unfortunately, internal recordkeeping can vary widely among these private entities, which can leave investors and consumers vulnerable to fraud and manipulation,” Beyer wrote, adding:
“This bill is a common-sense measure aimed at restoring transparency and confidence in digital asset markets.”
Under the bill, cryptocurrency service providers will be required to report all off-chain transactions to a CFTC-registered transaction repository within 24 hours. The announcement noted that the requirements are similar to rules for “virtually all securities and swap transactions.”
related: Cryptocurrency bill may be delayed as many prepare for U.S. government shutdown
U.S. lawmakers have been paying close attention to cryptocurrency regulation recently. In mid-September, nine U.S. senators expressed support for Senator Elizabeth Warren’s digital asset anti-money laundering bill. The bill was re-introduced in July 2023 and in its current form aims to crack down on non-custodial digital wallets and expand Bank Secrecy Act liability, among other legal measures, to combat the illegal use of digital currencies.
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