Key Highlights :
Cryptocurrency regulations are becoming increasingly complex as the digital asset industry continues to grow. To help firms navigate the regulatory landscape, U.S. Representatives Patrick McHenry and Glenn Thompson have proposed the Digital Asset Market Structure (DAMS) bill, which seeks to provide a framework to fill the gaps between the U.S. Commodity Futures Trading Commission (CFTC) and Securities Exchange Commission (SEC) on activities related to crypto-assets.
At a Coinbase-hosted event on Twitter Spaces on June 7, Messari CEO Ryan Selkis praised the new bill, saying it is a “10x improvement” on all other crypto bills introduced to the United States Congress so far. According to Selkis, the bill provides new firms with a clear path to compliance without instantly triggering securities laws.
TuongVy Le, head of regulatory and policy at Bain Capital Crypto, added that the bill finally gives token issuers “a path to compliance.” She explained that token issuers “need time to work towards” decentralization, but the SEC can swoop in and “bring enforcement action against them” before they reach that point. Le is hopeful that the DAMS bill can resolve this issue.
Paul Grewal, the chief legal officer at Coinbase, also acknowledged the problems that many token issuers are tackling. He said that “under the current law there really is no reasonable pathway for those assets that start out life as a security to evolve and involve in large part by decentralizing in a way that's recognized under the law.”
The DAMS bill is a strong step towards developing a regulatory regime that embraces innovation, maintains US industry presence and protects consumers. However, there are still many details to be ironed out before the bill can be implemented. The SEC has recently filed lawsuits against two of the largest cryptocurrency exchanges, Binance and Coinbase, for allegedly breaking securities laws by offering tokens as unregistered securities. At least 67 cryptocurrencies are now considered to be classed as securities, including Binance Coin (BNB), Solana (SOL), Cardano (ADA), Polygon (MATIC) and Cosmos (ATOM).
It is clear that the crypto industry needs a regulatory framework that is clear, consistent and up-to-date. The DAMS bill is a positive step in the right direction and Messari CEO Ryan Selkis has praised it for providing a clear path to compliance for new firms. As the bill continues to be discussed and developed, it will be interesting to see how it shapes the future of the crypto industry.