Legal expert: the Treasury department plans to “capture DeFi”
The emergency cryptocurrency provisions in the U.S. infrastructure bill target DeFi, Jake Chervinsky said.
In podcast on Bankless State of the Network, Compound General Counsel and Blockchain Association Chairman of DeFi Says Infrastructure Bills Have ‘Blinded’ Industry Through Crypto Tax Arrangements -coins. The announcement came nine days before its date announced by the Senate.
Although Compound’s general counsel wants to believe in elected officials. He maintains that previous discussions regarding the infrastructure bill are unrelated to cryptocurrency. Instead, he asserts more threatening motives for the Treasury Department to influence the formal legislative process.
Chervinsky accepts that he may be paranoid, but maintains that the ministry has sought a replacement to seek a serious reporting condition.
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Additionally, Steve Mnuchin, the former Treasury Secretary, has been looking for ways to force self-guarded cryptocurrency wallets.
“Everything is linked to DeFi. The Treasury Department wants to resolve the DeFi takeover issue as well as extend its warrantless oversight over the peer-to-peer financial structure.
According to Chervinsky’s statements, he obtained the first information that the ministry had previously resisted exempting software developers and network validators from the strict third-party reporting requirements under the bill because the legislation modified might not adequately capture DeFi.
He concluded that this is the reason why it is impossible to change the DeFi language and can only catch centralized exchanges.
Government officials misunderstand DeFi
Chervinsky quickly discovers that senators are not the only ones causing the misunderstanding. In addition, the Treasury Department has played a vital role in describing the language. And ensure that any proposed revisions are returned to the Treasury Department for rejection or approval.
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According to Chervinsky, the Treasury Department is afraid to claim that DeFi participants and DEX liquidity providers have teamed up to validate transactions. Thus, they should be spared from this regulation.
“From what I understand, this is what prompted the concurrent amendment, which clearly states that working minors are exempt,” Chervinsky added.
“It doesn’t make sense that you can create and exclude horrible things. Proof-of-work mining that boils the oceans, causes bad climate change, but can’t exempt proof-of-stake validators.
Although the Treasury Department caved in when it realized it couldn’t beat the industry. Chervinsky says he is concerned that unelected treasury officials have influence in the legislative process.
He says senators are not the main negotiators here. But mysterious unknown negotiators are buried within the Treasury Department. It is an alarming situation.
However, Chervinsky is celebrating his achievements in the cryptocurrency lobby to oppose the provisions.
According to him, the entire crypto industry has joined in opposing this threat of the bill. The important factor, however, is the agreement of the entire industry to protect themselves in DC together.
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