Revelations last year involving fraud, money laundering, lies and deception by FTX, Binance and others have shaken the public’s trust in the digital assets industry – especially its trading platforms. Transparency and a strong commitment to investor protection are vital to earning back that trust.
These legislative efforts are novel in using blockchain technology’s noteworthy public transparency and auditability functionality. Blockchains track debits and credits to accounts on a ledger, just like an ordinary accounting system, but in a real-time, transparent, and immutable fashion. The existence of any asset that resides on a public blockchain, whether a tokenized security or a digital commodity, is verifiable by customers and regulators.
The other “must have” is Rep. Beyer’s proposal requiring trading platforms to report off-chain and on-chain transactions to a CFTC trade repository, similar to how the agency already collects and oversees swaps markets. While on-chain transactions are already recorded on their respective blockchains, this bill would standardize and gather that data, along with off-chain transactions, to offer customers transparency and confidence in trading platforms and the digital asset market generally.
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