US Treasury Attempts To Take Over DeFi – Jake Chervinsky Concerned Over Cryptocurrency Law
Compound Labs General Counsel Jake Chervinsky said in a podcast that the cryptocurrency clauses added to the US infrastructure bill at the last minute would allow the US Treasury to “take over” the DeFi sector.
In his opinion, the Ministry of Finance has long been looking for an alternative way to implement strict reporting requirements related to stand-alone cryptocurrency wallets.
Chervinsky, citing its sources, said the Treasury Department was initially opposed to exempting network validators and software developers from strict third-party reporting requirements, as the amended legislation did not “catch DeFi” enough.
“The Treasury has been instrumental in developing the language and also ensuring that any changes we proposed are returned to the Treasury for approval or rejection,” Chervinsky said.
Chervinsky understands that the Treasury Department feared the industry would argue that DEX liquidity providers and other DeFi participants are involved in transaction verification and therefore should be exempted from regulation.
“As I understand it, this is why we received a competing amendment that specifically stated that the exception applies only to Proof-of-Work miners,” Chervinsky added.
He also noted the achievements of the crypto community in countering these provisions:
“The entire industry, without exception, came together to fight this… Yes, this bill is a threat, but more important was how effectively the industry was able to rally and defend itself in Washington.”