Legal Expert: Treasury Department Plans To “Capture DeFi”

The emergency cryptocurrency regulations in the United States Infrastructure Act target DeFi, says Jake Chervinsky.

During a podcast on the Bankless State of the Network, Compound General Counsel and DeFis Chairman of the Blockchain Association explains that infrastructure laws have “blinded” the industry with cryptocurrency taxation. The announcement came nine days before the date set by the Senate.

Though the Compound General Counsel wants to believe in the elected officials. He claims that the previous discussions about the Infrastructure Act have nothing to do with cryptocurrency. Instead, he claims that the Treasury Department has more threatening motives for swaying the proper legislative process.

Chervinsky admits he may be paranoid, but argues that the department was looking for a replacement to get a serious complaint.

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In addition, former Treasury Secretary Steve Mnuchin was looking for ways to enforce self-custody cryptocurrency wallets.

“Everything has to do with DeFi. The Treasury Department wants to solve the problem of gaining control of DeFi and expand its no-guarantee oversight of the peer-to-peer financial structure. “

According to Chervinsky’s statements, he received the first information that the ministry had previously resisted exempting software developers and network validators from strict reporting obligations by third parties, as the amended legislation may not adequately capture DeFi.

He concluded that this is why it is impossible to change the DeFi language and only intercept the centralized exchange.

Government officials misunderstand DeFi

Chervinsky quickly finds out that not only senators are responsible for the misunderstanding. The Treasury Department also played an important role in outlining the language. And ensure that any proposed revision goes back to the Treasury Department for rejection or approval.

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According to Chervinsky’s statement, the finance department fears claiming that DeFi participants and DEX liquidity providers were involved in validating the transactions. You should therefore be spared from this regulation.

“To my understanding, this led to the competing amendment which clearly states that work records are exempt from miners,” added Chervinsky.

“It doesn’t make sense that you can create terrible things and exclude them. Ocean-boiling proof-of-work mining causing dire climate change, but proof-of-stake validators cannot be exempted. “

Though the Treasury Department gave up when it realized it couldn’t defeat the industry. Chervinsky said he was concerned that unelected tax officials could influence the legislative process.

He says the senators are not the main negotiators here. But some unknown mysterious negotiators are buried in the Treasury. It is an alarming situation.

However, Chervinsky is celebrating his accomplishments in the cryptocurrency lobby to defy regulations.

According to him, the entire crypto industry has come together to oppose this threat of law. However, it is important that the entire industry agree to protect themselves collectively in DC.

Selected image from Pixabay