This will likely have to be tested in court if not fixed legislatively.
What is more concerning is that legislators can come up with this clearly unworkable law without doing a modicum of research.
What is more concerning is that legislators can come up with this clearly unworkable law without doing a modicum of research.
Today if I have a cash transaction greater than $10k I have to report it. This bill just clarified that cash includes digital assets.
Is your issue with the existing law or you feel crypto shouldn’t be treated like cash?
Both. This law is wrong (even without the crypto / DeFi elements) and crypto shouldn't be treated like cash. It's not property, or even a legally enforceable contract like the one that governs your relationship with your bank. From any reasonable perspective it should be classified as something akin to "goodwill" and not something the law should concern itself with.
Currencies do not attract CGT on disposal. Assets (like crypto) do.
This is a big difference
I wouldn't assume this unless you are aware of specific case law that says this. If you held some assets on a blockchain and the developers decided to block your address after you made fun of them on twitter or something, it certainly seems like you'd have standing to sue.
What exactly would you sue them over? The design always depended on the voluntary consent of everyone involved. The developers never promised that the protocol would remain unchanged. This has happened before—for example, the Etherium hard-fork that reversed withdrawals from the DOA which were unexpected and unintended but authorized by the smart contract code—and no one on the losing side of that fork managed to successfully sue the developers for changing the protocol. They would have had standing if anyone did.
The developers don't even fully control it; as an open, distributed system, someone else can step in and supplant them with new client software if users (meaning mainly buyers and retailers accepting the currency) decide they prefer different rules. Whatever changes the developers might make is only an expression of their opinions about how the system should work. Other users of the network are not obligated to accept those changes if they happen to disagree.
Ignoring the changes to crypto, what makes the law wrong?
I think they know exactly what they are doing.
If this law is incompatible with DeFi, it is DeFi that is unworkable, not the law.