U.S. Representative Don Beyer (D-VA) has introduced new legislation aimed at tightening oversight of the crypto industry in the wake of the FTX collapse. The proposal calls for mandating that off-chain crypto transactions be reported to regulated repositories accessible to regulators.
The bill faces an uphill battle in the Republican-controlled House, where crypto legislation has already advanced without Democratic input. The Senate also appears unlikely to take up major crypto bills this session.
Beyer’s objective is to prevent opaque flows of crypto assets within exchanges by requiring transaction data be sent to external repositories visible to regulators like the CFTC and SEC. This could help avoid meltdowns like FTX’s, where most investor trades occurred internally off-chain.
To build support, Beyer is engaging with Republicans to potentially incorporate his data repository idea into their existing crypto market-structure bill. But its implementation costs and transparency implications may turn off crypto-friendly GOP lawmakers.
Beyer, while not on key crypto committees, has discussed his proposal with the House Financial Services Committee, which has led on crypto bills under Chairman Patrick McHenry (R-NC).
With Republicans controlling the House and agenda on crypto legislation, Beyer’s bill faces long odds. His past crypto bills have stalled, and this novel approach mandating off-chain transaction disclosures faces hurdles with industry-friendly lawmakers. But Beyer argues transparency is needed on trading platforms where consumers lack protections.
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