The bill is aimed at creating a legal framework for cryptocurrencies in the United States.
The document contains several important points that are likely to have an impact on the crypto market and legislation.
The law was leaked earlier on Twitter and then confirmed officially.
The U.S. Congress is working on a law that would require all cryptocurrency exchanges to register with the SEC and provide information about their operations.
The bill contains several key points:
- All exchanges must register with the SEC as a national securities exchange or an alternative trading system (ATS).
- Exchanges must provide detailed information about their operations, including proof of their ability to manage their risks and financials, as well as information about the owners.
- Exchanges will be required to report any suspicious activity within 24 hours of its detection by law enforcement agencies or other regulators (including FinCEN).
- Exchanges should have anti-money laundering programs in place so that they can identify customers’ identities and monitor transactions for suspicious activity.
- Allow tax-free purchases of goods and services valued at less than $200 when made using cryptocurrency.
- The IRS has some homework to do: The tax collectors need to start providing precise information on the new methods in which individuals might make money in crypto, such as airdrops, which are becoming more common.
- For the time being, there is no tax on cryptocurrency earned by mining or staking.
- Adding cryptocurrency to retirement accounts, such as Fidelity’s, is being investigated by the General Accounting Office (GAO) under the terms of the law.
- This regulation is the first step in the process of improving the security policies of companies that store crypto for others.
- In the event of a company’s insolvency, the digital assets of its customers would be safeguarded under the Act.
- Greater openness is required. As a result of this, token issuers would have to be more specific about their products, what a token is, and how it works.
This could mean that the United States is one step closer to having a law that allows it to regulate cryptocurrency trading and try to stop the use of cryptocurrencies for criminal activities.
The emphasis of a measure supported by both the Democratic Party and the Republican Party is on efforts to clarify the taxation of these assets as well as the role of government authorities in the regulation of these assets.
As early as 2023, the proposal might be put up for a vote in the House of Representatives.
The bill proposes the establishment of a commission with the purpose of gaining a deeper understanding of the ways in which cryptocurrencies may have an impact on financial stability and consumer protection. In addition to this responsibility, the commission would be entrusted with investigating the potential applications of blockchain technology across non-financial institutions.