Messari chief executive Ryan Selkis has, in a Twitter Space held Wednesday, June 7, lauded the suggestions enshrined in the Republican lawmakers. The executive response in the interview conducted by Coinbase indicated the new crypto bill would offer a solid framework that new and existing firms can embrace for compliance.
Republican Bill Delivers Tenfold Improvement to Digital Assets
The Messari executive praised the Republican-led proposals as a 10x improvement compared to past bills introduced to the US Congress. He notes that the Digital Asset Market Structure (DAMS) bill seeks to deliver a solid framework to fill the existing void.
The June 1 proposal will end the oversight feud pitting the Commodity Futures Trading Commission (CFTC) against the Securities Exchange Commission (SEC). The CFTC has previously claimed an oversight role on commodities, while SEC classified a dozen coins as security.
Selkis illustrated during the Coinbase-hosted event that Representative Glenn Thompson assisting Patrick McHenry, drafted the bill delivering a pathway optimizing compliance via decentralization without contravening the securities laws.
Bill Delivers Decentralization Path
Selkis posed a rhetorical question wondering how the tokens can, at their onset, contravene the securities laws temporarily. Such could only occur only when they are sufficiently decentralized.
Selkis lauded the input of Hester Pierce when chairing the SEC. He indicated that the former chair introduced the Safe Harbor suggestions in February 2020.
Messari’s head observes that a significant portion of the language captured in the Safe Harbor proposal now constitutes a significant portion of the legislative text. Selkis admits that such legislative text is present in the Republican crypto bill.
Messari CEO rules out the potential of previous proposals matching the current crypto bill that he considers a 10X improvement. The provisions enshrined in the bill are comprehensively unique to the suggestions captured in the bills introduced by other lawmakers.
Selkis likens the Republican crypto bill to the Digital Commodities Consumer Protection Act tabled before Congress. He explained that the bill introduction sought to tighten the supervision of the digital assets industry following the sudden FTX implosion and a resulting catastrophic outcome.
The pronouncement by the Messari chief executive garnered the support of TuongVy Le. The regulatory and policy executive within Bain Capital Crypto confessed that DAMS assures the token issuers a defined path to compliance.
DAMS Promises to Arrest Fundamental Challenge Confronted by Token Issuers
Le agreed with Selkis that the majority of crypto issuers and token projects are hardly decentralized from the onset of launching tokens. She indicated that the digital assets projects need sufficient time to accomplish decentralization.
She lamented the current settings where the SEC swoops and imposes enforcement against the crypto work as they attempt to accomplish decentralization. Le admitted that such possibilities constitute the fundamental challenge she hopes DAMS can resolve. She confirmed that the bill would offer a detailed path guiding token issuers on decentralization.
Selkis’ sentiments align with the stance adopted by Coinbase chief legal officer Paul Grewal who cited the absence of regulatory clarity as the origin of challenges token issuers are battling.
The attorney indicated that the current law fails to offer a reasonable pathway for assets that launch as security and gradually evolve into decentralized projects. The DAMS bill would fill the void in a manner that decentralization would become recognized under the law.
Ramification From SEC’s Enforcement Action
The bill’s tabling in Congress is timely when the crypto industry suffers ramifications following SEC’s decision to open a lawsuit against Binance and Coinbase. The charges initiated on June 5 for Binance and Coinbase 24 hours later claim the two leading crypto exchanges offered tokens despite being unregistered securities.
The enforcement action undertaken by SEC on Coinbase and Binance is having an industry-wide impact as the watchdog agency considers most main cryptocurrencies as securities. Besides Binance Coin (BNB), SEC classified Cosmos (ATOM), Cardano (ADA), Polygon (MATIC), and Solana (SOL) as securities.
The security classification prompted Robinhood and eToro to delist the coins that US customers can purchase from their token list. The enforcement action is set to cause a far-reaching impact across the digital assets sector, considering the scale of operations and transactions executed by Coinbase and Binance.
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