A Congressman Proposed Legislation For Centralized Off-Chain Transaction Tracking

09/29/2023

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The industry has seen growing concerns around proper protection of crypto investors, especially when it comes to off-chain transactions. Congressman Don Beyer has proposed a bill that would require companies to report off-chain transactions to the CFTC.

The Off-Chain Digital Commodity Transaction Reporting Act aims to protect investors from fraud and market manipulation. It obliges cryptocurrency companies to report every off-chain transaction to the Commodity Futures Trading Commission within 24 hours. By the way, this practice is applied to securities.

Unlike on-chain transactions, which are recorded instantly on the network, off-chain transactions go through several layers, which also makes them difficult to track. Beyer also emphasized that cryptocurrencies' internal accounting system can vary widely, leaving investors and consumers vulnerable to fraud and manipulation. He believes the bill will bring back the transparency that the crypto industry needs. It will not suppress the market, but rather keep investors safe.

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