New U.S. legislation proposes increased oversight of cryptocurrency transactions

A bill called the “Off-Chain Digital Commodity Transaction Reporting Act” was introduced on September 28 by Representative Don Beyer.

U.S. lawmakers are considering a new bill that would increase digital currency regulation and disclosure. The “Off-Chain Digital Commodity Transaction Reporting Act” was introduced by Representative Don Beyer on September 28.

This ground-breaking law requires all blockchain transactions to be reported by crypto service providers to a central government repository that is registered with the CFTC.

The major goal of this law is to protect crypto holders against litigation, manipulation, or fraud that may arise from off-chain or extra-blockchain activity.

Off-chain crypto transactions, in contrast to on-chain transactions, which are instantly recorded on the blockchain, cross extra layers, making tracing and monitoring more difficult.

Trading platforms that streamline transaction processing while keeping costs low have brought this problem to the forefront.

Currently, thousands of transactions are conducted “off-chain,” meaning they are not recorded in the blockchain’s public ledger.

To underline the precarious position of investors and consumers, Representative Beyer focused on the inconsistencies in internal record-keeping across these private businesses.

The measure mandates that within 24 hours of an off-chain transaction occurring, the crypto service provider must notify it a trading repository that is registered with the Commodity Futures Trading Commission.

This legislative action is in keeping with the current trend of legislators in the United States aggressively tackling cryptocurrency regulation.

The Digital Asset Anti-Money Laundering Act, was first sponsored by Senator Elizabeth Warren in July 2023 and reintroduced in the middle of September.

To combat criminal usage of digital currencies, the measure tightens regulations on noncustodial digital wallets and expands authorities granted under the Bank Secrecy Act.

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