HAVE YOU READ THIS Crypto Bill!? Regulations Incoming!?

The recent crash in the crypto market Has regulators circling Luckily pro crypto politicians have been Working hard to introduce reasonable Crypto regulations to prevent a Crackdown on the industry now one pro Crypto politician who’s been working on This is cynthia lummus whose crypto bill Reportedly leaked last week As it turns out however it’s not all Sunshine and rainbows That’s why today i’m going to give you a Bit of background about senator lumis’s Crypto bill tell you exactly what it Says in simple terms and consider what It could all mean for the crypto market [Music] All right you know the drill i need to Give you a disclaimer before i talk About this bill I am not a financial advisor and i’m Also not a shill i’m just an entertainer And educator with adequate skill Please contact a financial advisor if Your portfolio has been killed Now if this is your first visit my name Is guy and the coin bureau is here to Show you that there’s more to crypto Than digits That’s why we create high quality crypto Content that’s so good it should be Illicit Coins tokens news reviews and other Topics that will push your

Preconceptions to the limit So if this sounds legit the subscribe Button and notification bell are what You should hit Okay that’s all you need to know about This brit let’s unpack this crypto bill And see what’s in it Now if you’re unfamiliar with senator Cynthia lumis here’s what you need to Know Cynthia lumis is probably the most Pro-crypto politician in the united States and possibly the most pro-crypto Politician in the world besides Salvadoran president najibukeli of Course In late december last year cynthia Announced her plans to craft a bill that Would clarify crypto regulations in the United states once and for all Shortly afterwards she teamed up with Another u.s politician named kirsten Gillibrand to work on the bill Now this is significant because cynthia Is a member of the republican party Whereas kirsten is a member of the Democrat party now this bipartisan Support means it’s possible if not Likely that the bill will eventually Pass as it’s assumed to have support From both sides of the aisle Following months of conversations with Various regulators members of the crypto Industry and other u.s politicians

Cynthia and kirsten released a draft of The bill at the end of may this year and Released the finalized version of the Bill earlier this month As you might have guessed the crypto Bill that reportedly leaked was the one By cynthia and kirsten which is funny Because the few pages provided were Almost identical to the draft in may The leak was also met with scrutiny Whereas the official release of the bill The very next day was met with praise Now in any case the bill is called the Quote responsible financial innovation Act and it was officially presented to Other u.s politicians on the same day The final draft was released Specifically the 7th of june If you’ve watched any of our videos About other crypto bills you’ll know That there are quite a few hoops to jump Through before this particular crypto Bill can become law In this case cynthia and kirsten Specified in follow-up interviews that The bill will be presented to four Different political committees for Deliberation Once these four political committees Have come to an agreement the crypto Bill will be presented to the united States senate for a vote If approved it will be sent to the United states house of representatives

For a vote If approved again it will get signed Into law by the u.s president Now obviously this is all going to take Quite a bit of time and the consensus is That this crypto bill will end up on the Back burner because of the upcoming Midterm elections in the united states As such the bill may not become law Until sometime early next year which may Actually be good news for some Cryptocurrencies So without further ado sit back and Relax while i unpack what may be the Most important crypto bill in existence As always i’ll give you my thoughts as We go along should any arise The bill begins with definitions for Three terms The first term is commodities which are Assets like precious metals The bill defines commodities in Accordance with another bill and the Tldr here is that a commodity is any Asset that’s not a security and whose Price changes universally based on Supply and demand Bitcoin’s btc is therefore a commodity The second term is securities which are Assets like stocks the bill defines Securities in accordance with the howie Test and the tldr there is that a Security is any asset whose price action Is dependent on the actions of a

Centralized entity Many altcoins are therefore securities And the third term is digital asset Which the bill defines as quote a Natively electronic asset that confers Economic proprietary or access rights or Powers to its holder and is recorded Using cryptographically secured Distributed ledger technology or any Similar analog Naturally digital assets include all Cryptocurrencies and the bill pays lots Of attention to quote payment stable Coins which are defined as quote a Digital asset that is redeemable on Demand on a one-to-one basis for Instruments denominated in united states Dollars and defined as legal tender now If you watched our videos about the Assets backing stable coins you’ll know That the term legal tender includes u.s Government debt which happens to be the Primary asset backing regulated stable Coins like circles usdc and paxos’s busd Now logically this means that cryptoback Stablecoins like die and algorithmic Stablecoins are not payment stablecoins As per the bill’s definitions and in a Recent interview cynthia ann kirsten Specified that some of these non-payment Stable coins might be classified as Securities After giving a few more definitions for Other terms like smart contract and

Distributed ledger technology the bill Turns to the second topic and that’s the Taxation of cryptocurrency The bill basically says that Cryptocurrencies will be taxed under Capital gains not as personal income For anyone wondering capital gains tax Is typically applied only to the gains You made if any from investing in Cryptocurrency you don’t get taxed on The initial amount you invested The bill also takes time to address the Vague definition of a cryptocurrency Broker which some of you may recall was Snuck into the infamous infrastructure Bill last summer The vague definition meant regulators Could potentially go after crypto miners Validators and possibly even crypto Developers In this bill however the definition of Cryptocurrency broker is redefined as Quote any person who for consideration Stands ready in the ordinary course of a Trade or business to affect sales of Digital assets at the direction of their Customers aka crypto exchanges and the Like which makes perfect sense The bill even defines decentralized Autonomous organizations or dows and Their tax obligations This is where the point of contention Comes in because the bill classifies Dows as so-called disregarded entities

Which as far as i understand means that Daos must register with regulators What’s interesting is that the bill States that treasury management Including mining and staking by the dow As well as raising funds for the dow Will not count as a business activity Under the bill’s definitions I understand this as meaning that these Activities are not taxable events but It’s not entirely clear What’s even more interesting is that the Bill seems to imply that cryptocurrency Forks and airdrops will be classified as Taxable events which could get Complicated really quickly I also don’t think the government should Be allowed to tax what are ultimately Gifts but hey maybe that’s just me The bill then goes on to address Something you may have seen in the Crypto news and that’s fidelity allowing People to invest in btc as part of their Pensions The bill instructs various regulators to Do a deep dive into the pros and cons of This move and see if additional Regulations are needed there Regarding mining and staking the bill Specifies that crypto miners and Validators will not have to pay any tax On the coins or tokens they earned until They’re sold The way the paragraph is worded suggests

This tax exemption applies to quote Taxpayers which seems to be limited to Individuals Even so this would still be a massive Win for crypto miners and validators in The united states if this bill becomes Law On that note you can get the facts about The effects of crypto mining on the Climate by checking out our video about That using the link in the description Anyways the third part of the bill deals With the offering of securities which You’ll recall are assets like stocks Now this section honestly has a lot of Legalese but it seems that the bill Makes the following declarations about The sale of securities which you’ll Recall includes most altcoins First and foremost if more than 50 Percent of a coin or token supply is Being held by individuals and Institutions within the united states Then whoever created the coin or token Is subject to united states regulations And cannot be classified as a foreign Entity Second if the average daily trading Volume for a coin or token exceeds five Million dollars per day and the Individual or institution who created it Holds more than 10 of that coin or token Supply then the entity behind the crypto Project must provide information to

Regulators What’s nice is that these disclosures Won’t need to be extremely detailed and Will include stuff like basic Information about the company behind the Crypto project a brief description of The coin or token and its tokenomics and Some information about any affiliated Companies if applicable What’s even nicer is that the bill Demands that the securities and exchange Commission conducts an in-depth study About the crypto market to determine Things like how much investors need to Be educated and how regulatory burdens For the companies behind crypto projects Can be reduced The fourth part of the crypto bill Concerns the responsible innovation of Commodities which is a not so subtle Reference to established Cryptocurrencies like btc and eth which Cynthia and kirsten consider to be Commodities This reminds me of something else Cynthia and kirsten said in recent Interviews and that’s that they foresee Most cryptocurrencies starting out as Securities so like stocks in a company But transitioning to become commodities Like precious metals over time as they Decentralize To that end this part of the bill Focuses on adding digital assets to

Existing commodities regulations by Amending a whole bunch of different Sections More importantly it gives the Commodities and futures trading Commission or cftc the power to regulate Spot markets for cryptocurrencies like Btc and eth Now if i’m not mistaken the bill also Directs all exchanges that allow the Trading of cryptocurrencies that are Classified as commodities to hold these Currencies with a regulated custodian And that customer funds must be kept Separate from exchange funds makes sense What makes slightly less sense however Is that crypto exchanges will have to Register with both the cftc and the United states treasury department as Money services businesses though i Suspect that similar rules already apply Another tricky provision in the bill is That crypto exchanges shall quote permit Trading only in assets that are not Readily susceptible to manipulation If you’ve watched our video about the Wyckoff method you’ll know that market Manipulation is more common than you Think and not just in crypto so it’s Going to be interesting to see how Regulators interpret this clause in the Crypto bill Another clause that caught my eye Relates to emergency actions crypto

Exchanges could take which include the Quote authority to facilitate the Liquidation or transfer of open Positions in any digital asset or to Suspend or curtail trading in a digital Asset now call me crazy but i think this Means all the exchange outages and Sudden withdrawal pauses will become Allowed by law which is truly bonkers if True and just goes to show you that you Must always keep the coins and tokens You’re not actively trading in your Personal crypto wallet Now what’s a lot saner is the clause That states crypto exchanges cannot sell Their users crypto if they go bankrupt a Not so subtle reference to a Controversial sentence in coinbase’s Earnings report from the first quarter Of this year where it warned that it Might do exactly that if it goes Bankrupt Now because the government has to make Some gains too the bill states that the Cftc shall collect fees from Cryptocurrency exchanges to quote offset The costs of digital asset regulation There are some concerns that this could In turn increase the already sky-high Fees on many crypto exchanges These concerns seem justified given that The bill sets the ceiling for annual Exchange fees at a whopping 30 million Dollars

That’s the cost of consumer protection i Suppose Speaking of which the fifth part of the Bill pertains to consumer protection and Starts with a set of standards for Digital assets this includes stuff like Letting people know in advance when an Application crypto project or exchange Will be undergoing an update letting People know how exactly they’re making Money and lots of stuff related to the Transparency around the borrowing Lending and saving of cryptocurrencies The bill also demands that people be Made aware of when a cryptocurrency Transaction is considered final and if You watched our video about the fastest Cryptocurrencies you’ll know that when Exchanges consider a crypto depositors Final can vary regardless of the crypto Coin or tokens official tps Better yet the bill dedicates a section Of this part to the self-custody of Cryptocurrencies where it clearly states Quote Except as otherwise required by law no Person shall be required to use an Intermediary for the safe keeping of Digital assets legally owned and Possessed or controlled by that person In other words if this bill becomes law U.s citizens will have the legal right To hold the keys to their crypto wallets Something which some u.s politicians are

Actively trying to prevent The sixth part of the bill talks about Payment stable coins and gets into the Nitty gritty of what laws payment Stablecoin issuers like circle and paxos Will need to abide by For starters all stablecoin tokens in Circulation must be 100 backed by us Dollars u.s government debt or other Assets that fall in the same category i Couldn’t help but notice that the bill Also includes quote Any other high quality liquid asset Determined to be consistent with safe And sound banking practices as Determined by the appropriate federal Banking agency or state bank supervisor As potential backing for a stablecoin Now in theory this means another Cryptocurrency like btc could someday Become the collateral for a payment Stablecoin assuming it meets these Criteria and is approved by the Appropriate regulator Although this would never happen at the Federal level i could see it happening At the state level Alternatively this could be cynthia and Kirsten setting the groundwork for Something else they mentioned in their Recent interviews and that’s that they Foresee stable coins being backed by Wholesale central bank digital Currencies

Now for context wholesale cbdcs will be Used by select individuals and Institutions whereas retail cbdc’s will Be used by regular people While cynthia and kirsten are vehemently Against retail cbdc’s having a Stablecoin backed by a wholesale cbdc May not end up being all that different In practice As many of you will know one of the Countries that’s currently in the Process of rolling out its retail cbdc Is china whose digital yuan is actually Addressed in this crypto bill The bill seems to instruct regulators to Set up the necessary guard rails for the Us government to transact in the digital Yuan Now Don’t get any silly ideas this is Clearly preparation for cross-border Payments between the united states and China involving cbdc’s not a Confirmation that the united states will Be adopting the digital yuan believe me When i say that the united states is Committed to the dominance of the us Dollar If you insist on having a silly idea Consider the fact that this part of the Bill includes a small section about Sanctions compliance of stable coins Which begs the question of whether Stablecoin holdings could be

Automatically frozen if they fall into The wrong hands or even just find their Way into the wrong region If you want fuel for another silly idea This part of the bill also includes a Small section about how the financial Crimes and enforcement network or fincen Will be in charge of overseeing Innovation in the crypto industry and Report to politicians and regulators if They see something suspicious This happens to be where the bill makes The first mention of decentralized Finance which it notes as a specific Point of focus for fincen Now if you’re wondering where these Peculiar crypto regulations are really Coming from you can check out our video About the financial action task force’s So-called recommendations using the link In the description Anyhow the seventh part of the bill is About quote responsible banking Innovation which is essentially code for Start adopting these technologies or You’ll be put out of business In all seriousness the bill says that The existing financial system needs to Start integrating with crypto Technologies to leverage their Efficiency but i will caution that this Doesn’t necessarily translate to Adopting crypto per se just a push for Financial institutions to adopt

Distributed ledger technology the bill Also says that regulators need to Establish exactly how much information Needs to be gathered from people who are Using cryptocurrency exchanges to ensure Compliance with anti-money laundering Rules yep those decades-old anti-money Laundering rules that have of course Managed to solve money laundering Similarly the bill says that regulators Need to establish standards for the Custody of cryptocurrencies and other Digital assets and i’ll quickly note That cryptocustody regulation seems to Be one of the preconditions for the Approval of a physically backed bitcoin Etf by the sec Now the eighth and final part of the Bill is where things start to get really Interesting because it’s about the Coordination between all the different Regulators and how they should turn These plans into action Buried in all the boring stuff about When all these regulators need to make The changes detailed in the bill lies an Instruction to assess whether crypto Transactions should be subject to the Same money transmission laws as regular Currencies which is likely a reference To the travel rule As some of you will know the travel rule Requires you to provide information About every transaction above a certain

Amount two regulators usually one Thousand dollars It should go without saying that this Would be next to impossible to do for Crypto transactions especially those Involving d5 protocols Now this is where the bill finally Addresses d5 protocols and it seems to Be quite vague as to what should be done About them The short of it is that it calls on Regulators to coordinate with defy Developers to better understand this Crypto niche so that it can also be Regulated Now the bill also notes quote tangible Net worth and permissible investment Requirements as one of the things for Regulators to examine which i interpret As the possibility that retail investors Will be limited from investing in many Altcoins as is currently the case with Other assets deemed too risky On the bright side the bill instructs Regulators to do a thorough analysis of Crypto’s energy use and see whether There are ways crypto can be used to Optimize or bootstrap current and future Renewable energy infrastructure Last but not least the bill calls for The establishment of a quote advisory Committee on financial innovation which Will consist of 10 members six of whom Will be appointed by the u.s president

Now if that wasn’t concerning enough Only two of these members will be picked From the private sector better yet the Composition of this committee will Change every four years and none of the Ten committee members will be Compensated for their work just their Travel expenses if any The convenient consequence of this is That the committee will only cost Taxpayers one million dollars per year The silver lining is that it sounds like This committee’s powers will be limited To crypto oversight not enforcement Knowing governments though it’s only a Matter of time before their powers start To expand and the cost of the committee Starts to grow exponentially That’s why some would argue that the World would be better off if governments Were replaced by community-oriented Decentralized autonomous organizations And you can find out more about how that Could work using the link in the Description So now for the big question what does This all mean for cryptocurrency Well i’ll start by saying that for the Most part what the bill is suggesting is Logical and it’s easily the most Comprehensive crypto bill to appear in The united states to date Of course there are concerns to be had About the regulation of decentralized

Autonomous organizations and d5 Protocols but it’s not nearly as Overreaching as the outright bans of Dows and d5 protocols that many Politicians have proposed in recent Months Not only that but the dows and d5 Protocols that are truly decentralized Should have no real reason to fear this Regulation nor should nft projects given That cynthia and kirsten explicitly left Out nfts on the grounds that they’re Difficult to categorize Now it looks like cynthia and kirsten Did something right because the bill has Seemingly earned the approval of the Crypto industry and politicians from Both parties while simultaneously Pissing off sec chairman gary gensler Who’s apparently not a fan of it This might have something to do with the Fact that it’s likely to protect most Major cryptocurrencies from an sec Crackdown as they’ll be classified as Commodities and subject to the much more Reasonable regulations of the cftc That said the altcoins that aren’t Classified as commodities could be Absolutely destroyed by the sec if this Bill becomes law Make no mistake many of them would be Immediately delisted from all crypto Exchanges and probably slapped with Massive fines

In that sense there’s more to be done on The front end of the curve because if New cryptocurrencies must start off as Securities in the united states they Could have a hard time getting off the Ground at all even with the extremely Lax reporting requirements proposed by The bill Now all in all this bill is a seriously Good start and cynthia and kirsten have Emphasized that that’s all it’s meant to Be for the time being It’s going to take months if not years For all these regulations to be hammered Out and this bill could look a lot Different once it does inevitably become Law This means it could look a lot worse but It also means it could look a lot better And given how much the crypto industry Has been spending on lobbying these days My bets are on the latter More about the crypto lobby in the Description And that’s all for today’s video about The leaked crypto bill if you found it Informative let me know by smashing the Like button if you plan on sticking Around for more summaries subscribe to The channel and ping that notification Bell While you wait you can check out all the Crypto deals i have for you which will Help take the edge off your portfolio

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