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Messari CEO Ryan Selkis praised the recently proposed Republican cryptocurrency bill, noting that it is a “10x improvement” over all other cryptocurrency bills submitted to the US Congress so far.
The Digital Asset Market Framework (DAMS) Bill, introduced June 1, proposes to create a framework to fill gaps in the regulatory process between the U.S. Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) regarding activities related to sk crypto assets.
Speaking at a Coinbase-hosted Twitter Spaces event on June 7, Selkis explained that U.S. Representatives Patrick McHenry and Glenn Thompson have devised a way for tokens to achieve conformity through decentralization without immediately triggering securities laws.
— Coinbase ️ (@coinbase) June 7, 2023
“How could tokens at a very early stage be temporarily compliant with securities laws if and until they were decentralized enough?” Selkis asked rhetorically.
He went on to note the past work of U.S. Securities and Exchange Commission (SEC) Chair Hester Pierce, who published the Safe Harbor proposal in February 2020.
“Many of the language that she included in these proposals is now being worked out in the legislative text. [и] they seem to be reflected in this new bill.” He added:
“I really think it’s probably a 10x improvement over anything we’ve seen so far.”
The most recent such cryptocurrency bill introduced in Congress was the Digital Goods Consumer Protection Act (DCCPA), which was introduced on August 3 to ensure continued control of the cryptocurrency industry following the collapse of FTX.
Messari CEO comments were echoed by Tuongwi Le, head of regulation and policy at Bain Capital Crypto, who added that DAMS is finally giving token issuers “a path to compliance.”
“The problem that many cryptocurrency issuers or token projects face is that when you launch a token, you don’t immediately become decentralized, right?” Le said.
Great to be on today with @impaulgrewal @JBSDC @twobitidiot! @coinbase thanks for having me. There’s a lot going on right now, but we are fighting for progress and innovation and something better than the status quo. And we will get there! – forward! https://t.co/oHGhh6wssP
— TuongVy Le ️ (@TuongvyLe12) June 7, 2023
She explained that token issuers “need time to work on this,” but while this is happening, the SEC can step in and “take enforcement action against you.”
While Le believed this has always been a “fundamental problem,” she remains hopeful that DAMS can solve it once and for all:
“I think this bill is aimed at that. This gives token issuers the opportunity to achieve this […] in a really thoughtful way.”
Paul Grewal, Coinbase General Counsel, also acknowledged the challenges many token issuers face:
“Under current law, there really is no reasonable way for those assets that start life as a security to develop and engage largely through decentralization in a manner recognized under law.”
While there are many details to be ironed out, the Digital Asset Market Structure Discussion Draft is a strong step towards developing a regulatory regime that embraces innovation, maintains US industry presence and protects consumers.
— paulgrewal.eth (@iampaulgrewal) June 5, 2023
Related: Cryptocurrency lawyers accused Gensler of all cryptocurrencies being securities
The bill was discussed in light of the recent spate of lawsuits filed by the SEC against two of the largest cryptocurrency exchanges, Binance on June 5 and Coinbase on June 6, for allegedly violating securities laws by offering tokens as unregistered securities.
The SEC currently considers at least 67 cryptocurrencies to be classified as securities.
Among the most notable tokens that the financial regulator considers securities are Binance Coin (BNB), Solana (SOL), Cardano (ADA), Polygon (MATIC) and Cosmos (ATOM).