On September 15, participants of the crypto community responded to the proposed Digital Commodities Consumer Protection Act (DCCPA). During the second panel of the Senate Agriculture Committee hearing, invited speakers praised the overall content of the bill but also offered suggestions for improvement.
All of the five speakers, as well as Jake Chervinsky (head of policy at Blockchain Association), issued a statement on the bill shortly after the hearing session ended.
Specifically, Chervinsky raised his concerns about the bill’s definitions. Every commenters seek precise definitions of securities and commodities.
Coinbase Vice President Christine Parker remarked that —although there is a dedicated section for securities in the bill — it still does not explicitly define what is or what is not a security (through the application of the Howey test or elsewhere).
Sheila Warren, CEO of Crypto Council for Innovation, stated the bill is up to the agencies and Courts to determine whether a digital asset aside Bitcoin and Ether is security or not. Warren believes that this is not a proper approach and has substantial negative effects on consumers.
The definition of commodities in the bill, according to director of financial regulation and corporate governance at the Center for American Progress Todd Phillips, does not take the role of miners and stakers into consideration.
Warren added that the bill restricts brokers, dealers, and trading facilities to only dealing in “transactions” or “digital commodities” that are not “readily susceptible to manipulation”, and highlighted the last part and questioned what it really means.
Heath Tanbert, the chief local officer at Citadel Securities and a former head of the Commodity Futures Trading Commission (CFTC), believes that the required registrant descriptions under the bill were too vague. He also advocated for a clearer prohibition on rulemaking by enforcement, saying: “While the CFTC has not typically engaged in rulemaking by enforcement, it is important for Congress to make its intent on this point crystal clear.”
The definition of “digital commodity platform”, according to Chervinsky, was overly broad and might subject some companies to “onerous requirements that aren’t justified by the minimal degree of risk they pose”. The requirements for those platforms have also put privacy at risk.
The presenters raised a number of concerns regarding the scope of the bill as well. According to Warren and Chervinsky, the bill requires details to limit the CFTC’s authority so as to prevent regulating transactions that do not take place in the United States.
Chervinsky said the bill “may be viewed as the prohibition of decentralized finance (DeFi)”, to which Warren agreed as he claimed that the bill’s restrictions would make DeFi “unworkable.”
Denelle Dixon, executive director and CEO at Stellar Development Foundation, brought out the possibility that “some could interpret the text to cover aspects of the technology rather than the participants offering products and services that leverage the technology.”
On August 3, Agriculture Commitee ranking member John Boozman and chairperson Debbie Stabenow introduced the DCCPA. The bill, which is not likely to be passed during the current Congress, had its first hearing recently.
